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NIH Policy on F&A Reimbursement for Genomic Array Purchased Services

Posted on June 28, 2010 at 1:24pm

This new policy was included in the June 24, 2010 COGR Meeting Report.


On May 13, 2010, the NIH policy announced a new policy for F&A reimbursement on Genomic Array (GA) purchased services. The new policy appeared to originate from concerns at several NIH Institutes and Centers that GA activity comprised a significant portion of NIH award budgets, and after the full F&A rate was applied to GA activity, the financial impact on the award budget was unacceptable.


The new policy, to be applied prospectively to new commitments established by competing awards and by administrative supplements, states that GA purchased services are to be treated more like a subcontract where essentially only the first $75,000 (on an annual basis) of GA purchased services are eligible for F&A recovery.  The new NIH policy can be found at:


COGR strongly opposed the new policy in a letter to NIH. We objected on a number of levels, including: 1) the inconsistency of the new policy with standard Circular A-21 cost principles, and 2) the poor precedent this action would set for how policy is made by Federal agencies. The NIH notice references section G2 of Circular A-21 that states: “Other items may only be excluded where necessary to avoid a serious inequity in the distribution of F&A costs.”  While COGR understands that certain cost items disproportionately generate F&A, the entire F&A rate calculation process is premised on an “averaging concept” designed to normalize the variations across different programs and cost items. If unchecked, this language from section G2 could be used (and abused) regularly by an agency to circumvent paying F&A costs.


The COGR letter is posted on the COGR home page at www.cogr.edu, and can be found under the link titled: “May 27, 2010 - Letter to NIH on Genomic Arrays Policy. A number of you have shared with COGR the letters your institutions have sent to NIH. We encourage you to email or fax letters to Sally Rockey at NIH:  Sally Rockey, Acting Deputy Director for Extramural Research (sally.rockey@nih.gov or fax to 301-402-3469).  Any references of support from faculty members may also be helpful.


COGR staff is scheduled to meet with NIH representatives concerning this topic in mid-July. We will keep the COGR membership posted on important developments.

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