In general, proposals consist of two parts: the technical proposal, and the cost proposal or budget.
The principal investigator is responsible for preparing the technical proposal in accordance with sponsor guidelines and requirements.
Cost proposals are prepared by OSP with input from the principal investigator and, of course, the approval of the teaching unit head and the college dean. OSP prepares internal budgets, required sponsor budget forms, and internal routing forms explicating important financial arrangements and specifying the commitment of University resources. OSP staff also prepares all application forms accompanying the proposal submissions.
A good technical proposal is a concise and coherent explanation of a research or programmatic plan with specific and reasonable goals. These goals, and the methods that will be used to achieve them, must be stated clearly. Project objectives should conform to the interests and guidelines of the sponsoring agency. The technical proposal must also demonstrate a convincing need for the proposed activity, either by showing that it fills an important gap in existing knowledge, or by showing that it serves the needs of a specific clientele of particular concern to the funding source.
Concurrent with the preparation of a technical proposal, the principal investigator should contact the teaching unit head and college dean to seek approval and support for the project. Issues of time commitments, space, facilities, course releases, overload, and over base situations should be resolved prior to submission. OSP can aid the principal investigator on issues such as hiring additional staff or consultants, leasing space off campus, and/or entering into subcontractual agreements. Some of these require liaison between OSP and other University offices.
In addition, OSP prepares any subcontract documents in accordance with applicable sponsor policy. For example, the federal government mandates that certain terms and conditions must be included in all subcontracts involving federal "pass-through" funds; other sponsors may have similar requirements. In such instances, OSP transmits relevant material to the subcontractor for review and signature.
OSP also prepares "Teaming Agreements." These are understandings between two organizations working together on a proposal. "Teaming Agreements" must be routed in the same manner as a proposal to ensure that the school or college Dean is aware of the commitment to propose.
Checklist for Principal Investigators Developing a Proposal
To ensure the quality of the technical proposal, principal investigators should prepare answers to the following:
• What title or project name will reflect the name of the proposed research?
• What is the research problem or need for this activity? Have you reviewed current literature to determine the need for such a project or conducted a needs assessment?
• What do you hope to accomplish specifically as a result of this project?
• How will you accomplish the project goal? Why is your approach particularly suited to the problem? Discuss the activity concept, project structure, and/or formal methodology.
• How will you prove your results? An evaluation plan complete with measures of efficiency, effectiveness, or outcomes as appropriate to the project design and methodology should be described.
• What special compliance issues and risks are associated with the project? Discuss plans for IRB and /or Animal Care and Use Committee Approval, use of hazardous materials, or other risk management issues.
• Where will the project be conducted? Have space needs been evaluated?
• When will work on the project begin? When will it conclude?
• What are the qualifications for serving as the principal investigator on this particular project? Identify other skills and qualifications necessary to the activity and where/how you will provide that expertise.
• How much will it cost for you to perform this work? (This question can be fully answered only after the cost has been prepared with the assistance of the OSP staff. Effective technical proposals, however, should indicate bottom-line costs, along with the levels of effort to be invested by principal investigator and other key project personnel.)
After an initial draft of the technical proposal has been completed, the cost proposal, or project budget, can begin to be formalized. Budgets include two categories of costs: Direct and Indirect Costs.
Salaries & Wages: All personnel who will devote time to the project are listed in the budget. Include titles, the percentage of time to be spent on the project, base salaries, and the amount the sponsor is asked to pay to support each person for the budget period (or their individual period of performance).
Proposed salaries are estimates and are paid in accordance with established University guidelines. Salary estimates beyond the current fiscal year should include merit increases (which are not guaranteed) based on the approved Budget Assumptions. Pursuant to federal regulations issued by the Office of Management and Budget (OMB), salaries charged to sponsored agreements may never exceed the proportionate share of the employee's base salary for that period (based on level of effort applied to the project). OMB regulations further instruct that rates of pay may not be other than the employee's base salary with the University. These regulations apply only to federal contracts or to Principal Investigators who have a combination of federal and private funding.
Staff positions committed at 80 percent or more of time to a sponsored project and on some other university supported work are considered full-time. New staff must be classified and recruited by the Office of Human Resources. OSP can assist in obtaining a "provisional" classification and salary base from Human Resources. The twelve-month salary for a staff person is the base salary. Staff supported by sponsored funds may be permanent or temporary appointments hired for the project specifically.
Faculty salaries are based on nine months of full-time service during the twelve-month academic year (AY). This income is the base salary. Sponsors differ on providing funds for the summer salary. In general, the federal government permits faculty members to earn up to 133% of base salary in a twelve month period, including summer teaching, summer research, and administrative stipends, if the faculty member is being paid with federal funds. The University is responsible for the administration and compliance with this policy. Therefore, a faculty member who performs additional work during the three summer months may earn up to one-third (33%) of base salary in that period, depending, of course, on availability of funds. Faculty working on projects with non-federal sponsors (and not having any concurrent federally sponsored activity) may exceed 133% if funds are available.
Some proposals involve course releases, a reduced workload, or a workload reallocation for a faculty member to work on an externally funded grant or contract. The faculty member's time may be paid for by the funding source or may be cost-shared by the University. For budget preparation and research planning purposes, the University uses the following assumptions about the allocation of a faculty member's time:
• teaching, 60%
• research, 30%
• service, 10%
Graduate research appointments are for eight months of academic year support, with a possibility of additional summer support. Graduate assistants work 16 weeks per semester, 20 hours per week, and receive up to 24 credit hours of tuition per academic year, plus a stipend. A graduate study grant recipient works 10 hours per week for 16 weeks per semester and receive up to 24 credit hours of remitted tuition. Monthly stipends and tuition remission are appropriate charges to some sponsors.
Fringe Benefits: Fringe benefits consist of the University's contributions to Social Security (FICA), retirement programs (such as TIAA/CREF), health insurance, disability insurance, life insurance, workers' compensation, unemployment compensation, and tuition remission. Fringe benefits are calculated as a percentage of salary.
A fringe benefit rate of 26.5% is charged on the salaries of full-time faculty and staff. A rate of 8% is charged on the salaries of part-time employees, student employees, and faculty working during the summer months. The fringe benefit rates are predetermined for a specified period from the University's cognizant government agency; the current rates are in effect until April 30, 2016 and are provisional after that time.
Consultants: Consultants provide expertise from outside the University. Consultant rates are subject to approval by the sponsor. Supporting documentation for the rate based on education, work experience, specialized technical expertise, and prior rates of pay as a consultant should be available upon request.
Intra-university consulting is normally undertaken as a University obligation with no additional compensation. In some instances, when consulting is performed in addition to one's regular teaching unit load, compensation above base salary may be possible if approved in writing by the sponsor and the Vice Provost for Graduate Studies and Research.
Subgrants and Subcontracts: Subcontracts are made with companies or organizations that will provide outside expertise to a grant or contract. Before an agreement is made with an outside contractor, efforts should be made to see if the expertise could be secured within the university. The subcontractor should provide a scope of work and a detailed budget for its portion of a sponsored program. Subcontractors may also provide cost-share for a program. Both types of commitments must be sent to the university in writing and signed by a person authorized to commit the organization. If 50% or more of the requested funding will go to a subcontractor, a justification should be prepared the PI and included on the routing form.
Capital Equipment: Principal investigators may budget for capital equipment to be used for a project.
Travel: Sponsors will generally pay international or domestic airfare if such travel is necessary to the project and is so justified and approved. For federally sponsored projects, all international travel must be on U.S. flag carriers. In accordance with University policy, food and lodging must be shown as reimbursable expenses. Also included should be local transportation costs, such as mileage and parking. While per diem reimbursement for travel on government contracts is set by the federal government on a city-by-city basis (and published in The Federal Register), the use of these rates still requires prior University approval, requested from the Controller's Office through OSP.
University employees are required to report international travel in advance of the trip to their academic units so that special international travel insurance may be arranged for them at no additional cost. In the case of students traveling abroad on a sponsored project, this insurance must be arranged for them through the university and the cost of the insurance must be charged to the grant budget.
Other Direct Costs may include:
• Supplies and other expendable materials, such as film;
• Computer software;
• Equipment maintenance and repair;
• Printing and publishing;
• Publication costs, such as page charges and reprints
Indirect Costs (Facilities and Administration Costs) - Also Known as Overhead
Indirect Costs (F&A Costs) are expenses incurred by the University for its facilities and services. Indirect costs are not profit, but are real costs to the University to support sponsored activities. Examples include building maintenance and operation, utilities, libraries, computer services and other facilities, payroll, accounting, purchasing, research administration, departmental administration, personnel services, and general administration. The University attempts to recover all of these support costs, in accordance with guidelines in the Office of Management and Budget Circulars, through the inclusion of indirect costs in proposal budgets.
Indirect costs must be included in the budget of every proposal. The University uses separate indirect cost rates for sponsored projects on and off campus. The University and the U.S. Department of Health and Human Services (DHHS), which is its cognizant federal agency for indirect rate negotiation, have agreed on the current negotiated indirect cost rate for federal contracts and grants in specified fiscal years. An equivalent rate must be applied to projects that are funded by private and nonfederal sources, pursuant to the agreement with DHHS and the Office of Management and Budget (OMB), Circulars A-21 and A-110.
American University has a Negotiated Indirect Cost Rate Agreement effective May 1, 2012 and valid through April 30, 2016. The rate assesses indirect costs on a Modified Total Direct Cost basis. The OMB Circular A-21 G.2. states that the Modified Total Direct Costs basis excludes assessment of indirect costs on tuition, capital expenditures, space rental, sub grants or subcontracts in excess of $25,000, and participant support costs. Participant support costs are defined as pass-through costs to support program participation directly attributable to an individual who is not an employee of AU or a consultant providing a service.
Some sponsors, particularly some foundations, have specific written policies that preclude the use of the full indirect cost rate. Some agencies limit indirect costs for instructional (or training) programs. Pursuant to approval of the Provost, the Director of OSP will honor sponsor prohibitions, or limitations on indirect cost recovery, that represent the written regulations of the sponsor. By contrast, for unilateral waivers of all or part of indirect costs by the University, a written justification from the principal investigator with the concurrence of the school or college dean, must be submitted to the Director of OSP through the established process. After OSP review, the request is submitted to the Provost through the Vice Provost of Graduate Studies and Research for final decision. Budgets with less than full indirect cost recovery must be justified on the basis of their special value to the University, or on the resulting competitive advantage.
Occasionally, sponsors require the University to make a contribution to a project's total cost needs. Cost sharing must have the concurrence of the teaching unit head and School/College Dean since their budgets bear such direct costs. Each college has a budget to cost share new expenses, and the authority to commit existing "on-budget" resources for sponsored projects. OSP has no resources for direct cost share or tuition remission.
Since cost sharing is examined and audited by the sponsor organizations, the budget proposal must specify the exact amount of contributions anticipated. The term "in-kind services" (for example, in the case of faculty time donated to a project) is difficult to audit and should be avoided. Instead, the budget proposal should include the dollar value of all such services, to ensure the project receives full credit.