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OSP | Proposal Guide | Modified Total Direct Cost

Modified Total Direct Cost - Excluded Costs

As a reminder, AU's negotiated rate assesses indirect costs on a Modified Total Direct Cost (MTDC) basis. Per OMB Circular A-21, Modified Total Direct Costs excludes indirect costs on the following:
  • Equipment Costs:
- Purchase including shipping and sales tax of tangible, non-expendable personal property having a useful life of more than one year and an acquisition cost of $5,000 or more per unit. This includes software costing $5,000 or more per copy license (including the cost of sales tax, shipping, and any installation charges).
- Fabrication of equipment
  • Rent, Alterations and Renovations:
- Off-campus rental of space and related maintenance costs (janitorial, utilities) but only if they are included in the rental agreement.
- Rent, alterations and renovations does not include other kinds of rental costs, such as for hotel rooms, equipment, or automobiles.
  • Tuition Remission:
- Direct-cost expenses for tuition and fee remissions (including graduate student health insurance) for University students.
  • Scholarships and Fellowships:
- Financial aid paid directly to University students (scholarships, fellowships, stipends, dependency allowances).
- This category does not include disbursement of salaries and wages.
  • Subawards/Subcontracts in Excess of $25,000:
- That portion over $25,000 of each subcontract with a third party.
- Facilities and Administrative (F&A) costs are assessed on the first $25,000 during each competitive project period.
- The initial $25,000 of each subaward is included in the base.
- When issuing multiple subcontracts to the same institution, exclude that portion over $25,000 of the combined amount of all of the subcontracts to that institution.
  • Participant Support Costs:
- 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.