Considerations

The Contract and Grant Manual provides guidance on the solicitation, acceptance or execution, and administration of awards from extramural sponsors.

Since contract and grant administration must synthesize the internal functions of an institution and external sponsor requirements, this Manual provides guidance on the University's policies related to the requirements of major external sponsors, such as the federal government and the State of California.

Roles and Responsibilities

The proposal preparation process requires the participation and coordination of multiple parties. A proposal is initiated by a Principal Investigator (PI), but there is an administrative support system that ensures the PI can prepare and submit a high-quality proposal package that meets both sponsor and institutional requirements. The Office of Research and Economic Development (ORED) supports PIs by providing technical proposal development support through the Office of Research Development (ORD); administrative proposal preparation and award negotiation & acceptance through the Sponsored Projects Office (SPO), and non-financial post-award administration through Contract & Grant Administration (CGA).

Proposal Preparation Roles and Responsibilities

Roles
R	Responsible for the current and through completion of the work to achieve the task
S	Support for those who are responsible
C	Consulted as needed in order to complete the task (two-way communication)
Responsible Party
PI	Principal Investigator
RA	Preaward Research Administrator
CGO	Contract & Grant Officer

 

Tasks	PI	RA	CGO
Completion of the Proposal Submission Request (PSR)	R	S
Disclose conflicts of interest and commitment	R
Disclose human subjects research	R
Disclose animal research	R
Disclose hazardous research materials	R
Disclose export controls involvement	R
Identify related intellectual property disclosures	R
Prepare proposal that meets requirements outlined in the sponsor's application instructions, including applicable rules and regulations	S	R	C
Prepare technical proposal	R
Prepare proposal that meets requirements outlined in the sponsor's application instructions, including applicable rules and regulations	S	R	C
Identify the appropriate indirect cost rate		R	C
Request an indirect cost policy exception request, if appropriate		R	C
Develop appropriate budget and budget justification to accomplish the scope of work	S	R
Verify that budget items are in accordance with Uniform Guidance (which also includes cost account standards)		R	C
Request on-or-off-campus space needed in addition to that already assigned to the PI	R	S
Request modifications or renovations to on-campus or off-campus space if necessary	R	S
Request cost share and matching funds according to University policy	R	S
Obtain letters of support of collaborators	R	S
Request and obtain budget, scope of work and relevant documents from subcontractors and consultants	S	R
Complete and route Cayuse proposal record	S	R
Certification of the Cayuse record	R	S
Monitor Cayuse record progress as it routes through the internal review process		R
Perform review of proposal according to sponsor and institutional requirements			R
Address issues with proposal identified by Contract and Grant Officers	S	R
Act as institutional authority as to acceptability of sponsor requirements			R
Maintain database of proposal submissions and awards (Cayuse)		S	R

Principal Investigator Eligibility

The University of California Contract & Grant Manual identifies the following individuals as eligible to serve as Principal Investigators for extramural contracts or grants.

Eligibility Matrix

Resources

Contract and Grant Manual - Chapter 1-500: Principal Investigator Guidelines

Academic Personnel - APM 110-4 Academic Senate Member

 

Members of the Academic Senate, including the following titles, whether in regular or emeritus status:

• Chancellor
• Vice Chancellor
• Dean (Academic)
• Professor
• Associate Professor
• Assistant Professor
• Research Professor
• Director of Academic Program
• University Librarian
• Chief Admissions Officer
• Registrar
• Senior Lecturer with Security of Employment at 100%
• Lecturer with Security of Employment at 100%
• Senior Lecturer with Potential for Security of Employment at 100%
• Lecturer with Potential for Security of Employment at 100%
• Appointees 50% time or greater in the Professional Researcher series.
  
  • Titles include: Assistant Researcher, Associate Researcher, Researcher
• Appointees 50% time or greater in the Adjunct Professor series.
  
  • Titles include: Adjunct Instructor, Assistant Adjunct Professor, Associate Adjunct Professor, Adjunct Professor

 

Principal Investigator Exceptions

Deans and ORU Directors must approve PI exception requests. However, the authority to approve exceptions to Principal Investigator status's eligibility requirements is vested in Vice Chancellor for Research. The Request for Exception to PI Status Form must be completed and included in the proposal Cayuse record with Dean/Director signatures before routing to the Contract & Grant Officer. 

Budget Preparation and Resources

Your budget is a financial proposal that reflects the work proposed. It outlines the expected project costs in detail and should mirror the project description. A budget is presented as a categorical list of anticipated project costs representing the researcher's best estimate of the funds needed to support the proposed work. The term "best estimate" is essential here. You will be held to using the costs detailed in your budget, so make sure you've correctly estimated what you will need to complete the project.

Reviewers want to know how reasonable the cost of your project is. They will ask themselves whether you are over or underestimating your expenses. A careful review of the budget lets the reviewer know that you're not asking for too much or too little, but rather, just enough funding.

A UCM internal budget should be prepared for each proposal. The internal budget will help complete any sponsor budget forms and the budget justification and assist with sponsor requests for additional details about how you generated your overall figure or where the money will be going. Remember, all budgets must be prepared following the Office of Management and Budget (OMB) Uniform Guidance (the UG) and University Cost Standards.

 

Direct and Indirect Costs

In sponsored awards, a proposal budget consists direct and indirect costs. Direct costs are expenses that can be easily and accurately linked directly to a particular sponsored project. Indirect costs are the other “costs of doing business” that cannot be applied directly to any one specific project.

• Direct Costs include:
  
  • Paid employee effort, including benefits
  • Equipment, materials and supplies
  • Foreign and domestic travel
  • Contractors, consultants and subawards
• Indirect Costs (IDC)
  
  • Facilities & Administration (F&A)
  • Overhead

Budget Format

The Sponsored Projects Office (SPO) developed a budget template that should be included with all proposals. The controlled document titled, “SPO-1035_V5 - Internal Budget Template is maintained by SPO. The budget template cannot be substituted with other formats.

 

Salary and Wages

Paid Employee Effort

Different types of employees can be paid from a sponsored project, and would thus need to be captured in a proposal budget:

• PI Salary
• Professional Research Staff
• Post-Doctoral Scholars (Post Docs)
• Graduate Student Researchers (GSRs)
  
  • Can include Tuition and Fee Remission
• Undergraduate Students
  
  • Hourly employees, can be subsidized by Work-Study

In order to accurately capture an employee’s cost in a budget, we need to know:

• Title/Step
• Pay Rate (usually monthly)
• Months of Effort per year
• % of Effort per month

(Pay Rate) x (Months of Effort) x (% of Effort) = (Cost of Employee)

 

PI Summer Salary

Most faculty are on a nine (9) month academic appointment, and therefore have three (3) summer months that they can dedicate to research each year. PI Summer salary is calculated as 1/9^th of their annual salary. Faculty are paid their nine (9) month academic appointment over twelve (12) months, so their regular paycheck is NOT the same as a summer ninth.

Example:

(Pay Rate) x 1/9 = (Summer Salary)

($80,000) x 1/9 = $8,888.89

 

Benefits

Composite Benefit Rates (CBR) are used for budget development of proposals. CBRs are standard benefit rates developed each fiscal year and are used for business transactions containing a fringe benefit component. Our current practice assesses fringe benefits based on hundreds of detailed rates, and with the adoption of CBRs, individual employee fringe benefits will be assessed using one of the rates posted to the Division of Finance and Administration’s costing policy webpage.

 

Student Employees

Student employees can work up to 49.9% time during the academic year, and up to 100% time for three (3) summer months. Graduate Student Researchers (GSR) qualify for full fee remission with an appointment of 25% or greater. GSR salary schedules are established by UCOP and can be found on their Academic Personnel and Programs webpage. Undergraduates are paid an hourly wage determined the Student Employment Services.

 

Materials & Supplies

Materials and Supplies are consumable items such as lab supplies, clinical supplies, glassware, chemicals, reagents, etc. used to conduct the work scope for a project.

 

Equipment

Equipment means tangible personal property (including information technology systems) having a useful life of more than one year and a per-unit acquisition cost which equals or exceeds $5,000.

Equipment quotes must be included in Cayuse proposal records for each item of equipment included in a proposed budget (formal quotes are preferred, but internet or email quotes from a vendor are sufficient).

 

Subawards, Consultants, and Contractors

Subaward

A subaward is a formal written agreement made between UC Merced and another legal entity (subrecipient) to perform an intellectually significant portion of the scope of work (SOW) under a UC Merced sponsored project.  A recipient of a Subaward (Subrecipient) is usually an institution that collaborates with the UCM Principal Investigator (PI). The Subrecipient performs and has responsibility for part of a sponsored project. Its services are of a specialized and specific nature and cannot be performed by UCM. A Subrecipient is normally reimbursed for expenses in arrears. UCM has the responsibility to monitor Subrecipient performance.

Proposed subrecipients must complete a Subrecipient Commitment Form. A full Subrecipient Commitment Package (Subrecipient Commitment Form, Scope of Work, Budget, Budget Justification, etc.) must be included in the Cayuse proposal record before routing to the Contract & Grant Officer for review.

 

Consultant

A consultant is an independent contractor hired to provide expert advice for short or intermittent time periods. A Consultant may be an individual or an organization. The Consultant assists the UCM PI. Consulting services are primarily advisory in nature and address a clearly delineated problem or provide a fee-for-service function. A Consultant is normally paid based on an hourly or daily rate or a fixed price for deliverables.

A letter of commitment for each consultant included in a proposed budget must be obtained and included in the Cayuse proposal record before routing to the Contract & Grant Officer for review. The letter must include a brief description of the services to be rendered and an hourly rate for the services to be provided.

 

Contractor

A Contractor provides goods or services within normal business operations and operates in a competitive environment providing similar goods and services to a variety of customers.

Following are characteristics of a contractor/fee for service purchase order. The contractor organization:

• provides a routine service (e.g., equipment fabrication or repair, data processing, performing routine analytical testing services, etc.)
• provides the goods or services as part of its normal business operations
• operates in a competitive environment (i.e., competes with others who can provide a similar service)
• provides similar goods or services to many different purchasers

 

Other Direct Costs

 

Graduate Student Tuition

Graduate Student Researchers (GSR) qualify for full fee remission with an appointment of 25% or greater. Tuition remission is a benefit paid to GSRs and a direct cost to the University.

 

Participant Support

The National Science Foundation (NSF) defines this budget category as, “direct costs for items such as stipends or subsistence allowances, travel allowances, and registration fees paid to or on behalf of participants or trainees (but not employees) in connection with NSF-sponsored conferences or training projects.” Any additional categories of participant support costs other than those described in 2 CFR § 200.75 (such as incentives, gifts, souvenirs, t-shirts and memorabilia), must therefore be clearly justified in the budget justification of any proposal submitted to NSF, and such costs will be closely scrutinized by NSF. (See the NSF PAPPG, Chapter II.E.7 for additional guidance.)

Furthermore, under the Uniform Guidance (200.456) other federal sponsors also may allow PIs to budget and charge for participant support costs. The sponsor’s guidance on the definition and treatment of Participant Support Costs should be strictly followed. Please note: Participant support costs are not routinely allowed on research projects but may be charged with sponsor approval if the project includes an education or outreach component and the federal agency approves such costs. Human subject payments are not considered participant support costs.

Participant Support Costs must be explicitly listed in the proposal budget or approved by the funding agency (through SPO) after the award has been made. Payments of such costs without obtaining prior sponsor approval risk being disallowed by the sponsor. Participant support costs should be excluded from the Modified Total Direct Cost (MDTC) when calculating F&A costs when the University’s federally negotiated F&A rate is applied.

 

Indirect Costs

UC Merced’s indirect cost recovery (IDC) rate is negotiated with and established by the University’s cognizant federal agency – Department of Health and Human Services (a copy of UCM’s agreement can be found here). The University of California has also negotiated an indirect cost recovery rate with the State of California. The IDC for proposal budget development is as follows:

 

All federal and non-State funded projects

On Campus: 55% Modified total direct costs (MTDC)

Off Campus (more than 50% of the work is performed off campus): 26% MTDC

 

State of California funded projects

On Campus: 30% Modified total direct costs (MTDC) through June 30, 2021

On Campus: 35% MTDC through June 30, 2022

On Campus: 40% MTDC starting July 1, 2022

Off Campus: 25% MTDC

           

Indirect Cost Policy Exceptions

Any opportunity that limits the University's ability to recover the indirect cost (IDC) associated with performing the research needs to be reviewed and approved by the Vice Chancellor for Research and the University of California Office of the President (UCOP). An Indirect Cost Policy Exception Form must be completed and included in the Cayuse proposal record for projects that do not include IDC's full recovery.

           

IDC Policy Exception based on Sponsor Policy

The sponsor restricts the indirect cost recovery rate based on an established policy. Any sponsor documentation of its indirect cost recovery restriction should include all required elements needed to calculate the indirect cost recovery, including a rate and a base. Documentation should be unambiguous in describing how indirect cost recovery is calculated so that UC may recover its entitled indirect cost under a sponsor’s policy. If the sponsor’s policy is unclear, the research administrator should request clarification from the sponsor. The sponsor’s policy and URL link must be included in the Cayuse record before routing the SPO proposal.

 

IDC Policy Exception based on Campus Determination

If the sponsor does not have a general policy or program-specific restriction on indirect cost recovery rates, and the full campus indirect rate cannot be applied, the PI needs to submit a formal request for a reduced indirect cost rate waiver, along with a strong justification. The justification should state how the reduced indirect cost rate would benefit the proposed project. A complete Indirect Cost Policy Exception Request Form must be uploaded to Cayuse before routing the proposal to the Contract and Grant Officer (CGO). Should the request not be approved, the full indirect cost rate will apply to the proposed budget.

 

IDC Policy Exception based on Special Approval (State of California)

If a State of California agency does not allow the IDC rate described in UC/CSU rates for State of California agencies, a ‘Special Approval’ request will need to be submitted to UCOP for their review. Special Approval guidelines apply whether the California State Agency is our direct Sponsor or the Prime Funding Agency to a subaward proposal.

 

Cost Share and Matching funds

Cost Share are project costs that are not paid for by the sponsor. Sponsors can request cost Share as part of proposal budget. It can be a percentage of total project costs or a fixed dollar amount. For federal funds, the cost share must come from a non-federal source.

Sponsor Requested Budget + Cost share = Total Cost of the Project

 

Types of Cost Share

	Is the Cost Share QUANTIFIED?
Is the Cost Share REQUIRED?		Yes	No
	Yes	Mandatory Committed	N/A
	No	Voluntary Commited	Volutary Uncommitted (not reported)

 

Mandatory Committed Cost Share

• Required by sponsor and included as an award condition in the RFP
• Included in proposal submission, budgets and budget justification
• Legally binding obligation to the sponsor
• Must be tracked and reported
  
  • Certified effort reporting for federal awards

Voluntary Committed Cost Share

• Not a condition of the sponsor or RFP
• Included in proposal submission, budgets and budget justification
• Legally binding obligation to the sponsor
• Must be tracked and reported
  
  • Certified effort reports for federal awards

Voluntary Uncommitted Cost Share

• Defined as effort over and above that which is committed and budgeted for in a sponsored agreement
  
  • PI does not quantify a specific commitment of effort or research costs in the proposal
  • Not tracked on the ledger or reported to the sponsor
• This is really about writing budget justifications where a PI is engaged with the research but isn’t direct charging effort to the project

 

Sources of Cost Share Commitments

 

Internal (University) Sources

• Campus funds from PI, department, VCR, Chancellor, etc.
• Faculty or staff effort and associated benefits
• Indirect Costs

External (Third-Party) Sources

• Non-UC collaborators or subrecipients
• Another sponsored agreement (grant-to-grant)
• Donated supplies, equipment or services (in-kind)

 

Using Indirect Costs as Cost Share

 

Waived IDC

• The difference between Merced’s federally negotiated IDC rate and the sponsor’s lower IDC rate This is used when sponsor will only pay a lower indirect rate AND they require a cost share commitment.

Unrecovered IDC (or Computed IDC)

• Calculated based upon applicable direct costs when the matched fund source does not accrue IDC. This is used when cost-sharing from university sources like discretionary accounts to maximize the university’s match

 

Benefits & Risks of Cost Sharing

Obtaining Cost Share Letters

Pre-Award Cost Share Activities	PI	RA
Review sponsor guideline for cost share requirements	X	X
Identify and determine cost share funding sources	X
Obtain approvals from Dept. Chair and VCR	X	X
Obtain letters of commitment from subrecipients or third parties	X
Prepare cost share budget to the same level of detail as in sponsor's requested budget		X

Cost Share Letters – University

• Must be allowed under the Proposal Guidelines
• PI requests from their Chair/Dean (the letter should come from the person who has the authority of the funding source)
  
  • RA can help create the initial draft of the letter to make sure that it includes accurate financial information
• Letter must have:
  
  • Source of cost share – department, another grant (can't use another grant unless an approval letter Is provided), gift, etc.
  • Type of cost share – salary, equipment, funds, etc.
  • Value of cost share (and effort if applicable)
  • Commitment from the Chair/Dean or others to provide the stated cost share for the named project
  • Letter must be signed
• Cost Share Letter(s) must be included in the Cayuse proposal record prior to routing to the Contract & Grant Officer

Cost Share Letters – Third Party

• Must be allowed under the Proposal Guidelines
• PI requests from the third party
• Letter must have:
  
  • Type of Cost Share – salary, equipment, space, etc.
  • Value of Cost Share (and hours/effort if applicable)
  • Letter must be signed
• Cost Share Letter(s) must be included in the Cayuse proposal record prior to routing to the Contract & Grant Officer

Cost Share Letters – Waived IDC

• Must be allowed under the Proposal Guidelines
• Essentially the same as a Vital Interest Waiver
• PI writes letter to VCR requesting waiver
• Letter must include:
  
  • Requirement of agency (mandatory or voluntary)
  • Allowability from agency
  • Statement of need (financial)
  • Letter must be signed and on UC Merced letterhead
• Cost Share Letter(s) must be included in the Cayuse proposal record prior to routing to the Contract & Grant Officer

Grant vs. Gifts

There are several mechanisms for external entities to provide financial support to University researchers. Grants/contracts and gifts are the most commonly used. Each mechanism has a unique function, but some sponsors use the terms interchangeably. University Office of the President has outlined the characteristics for both grants and gifts in the Contract and Grants Manual (Chapter 9-500). Correct classification cannot be based on the presence or absence of one characteristic. The University must exercise judgment to classify the grant/contract vs gift following the intent of UC policy. Each proposal opportunity or award should be thoroughly reviewed to reach the appropriate classification.

Considerations when making a grant vs gift determination

Question	Gift	Grant/contract
Does the project have a Scope of Work	Gift funding is generally provided to support a field of research of interest to the funder and does not include a specific period of performance.	If the funding is for a project specific scope of work the project should likely be classified as a grant/contract.
Are there terms and conditions associated with the proposal opportunity or award?	Gifts should be unrestricted without the expectation of any quid pro quo.	If there binding terms and conditions that include language on confidentiality, publication, copyright, patent rights, liability, insurance, regulations, allowable costs, subcontracting or any other type of contractual term, the project should be classified as a grant.
Are there deliverables or reporting requirements?	Gifts should not include milestons/deliverables and generally should not include progress or financial reporting.	Milestones, deliverables, and reporting are characteristics of a grant/contract.
Can the sponsor request the return of unexpended funds?	Gift funding is generally irrevocable.	Grants/contracts generally include provisions stating that unexpended funding should be returned to the sponsor.
Does the sponsor allow for the recovery of indirect costs?	Gifts do not generally allows for indirect cost recovery.	Grants/contracts generally include indirect cost recovery.

 

Grant and gift characteristics as outlined by the Contracts and Grants Manual (Chapter 9-500)

Gift	Grants/contract
Donor does not impose contractual requirements	Provision for audits by or on behalf of the grantor
Funds are awarded irrevocably	The grantor is entitled to receive some consideration such as a detailed technical report of research results or a report of expenditures
	Testing or evaluation or proprietary products is involved
	The research is directed to satisfying specific grantor requirements (e.g., terms and conditions stating a precise scope of work to be done rather than a general area of research)
	A specified period of performance is prescribed or termination is at the discretion of the grantor
	Funds unexpended at end of period shall be returned of the grantor
	Patent rights requested by grantor

 

Proposal Development FAQ

How are tuition and fees paid/spilt when a graduate student's salary is split between two grants or between a TA appointment and a GSR appointment?

They are generally split proportionately between the two assignments. However, there are different circumstances where you should reach out to Graduate Division for advice or to confirm the split (i.e., when one fund is a full overhead-bearing award and the other fund is not).