February 2018
Full Ecomonic Costing (fEC): Costing & Pricing Jennifer A Gilmartin Associate Director Research and Enterprise Head Research Services
2
“a price which, if recovered across an
institution’s full programme, would
recover the total cost (direct, indirect
and total overhead) of the institution,
including an adequate recurring
investment in the institutions
infrastructure”
Full Economic Costing (fEC) April 2006
….(included in grant Terms & Conditions)
Direct Costs
Project Costs available to
Principal Investigator
Estate Costs
Indirect Costs
Infra-structure Technician Costs (Lab Based only)
fEC comprises
Estate Costs:
Two rates: laboratory
and office/classroom
Includes:
energy/water costs,
depreciation of
buildings and
equipment,
cleaning/custodial
services, repairs &
maintenance
Indirect Costs:
Library,
HR Services,
Payroll,
Central IT,
Finance,
Research Operations
Office
Includes
departmental support
staff, office supplies,
postage, computers
Direct Costs
Project Costs available to
Principal Investigator
Estate Costs
Indirect Costs
Infra-structure Technician Costs (Lab Based only)
Costs
incurred at
Department
and
University
Level
Sustainability
Definitions
5 5
Directly Incurred
Directly Allocated
Directly Incurred Items or services incurred or purchased specifically for the project (audit trail to quantify) Consumables Travel/Conferences Post Doc New equipment Service
Directly Allocated An estimate where part of an existing resource is utilised
(subject to audit to ensure correct rates are used):
20% PI time (as appropriate to project)
pooled technician
access to a shared Major and Small
Research Facilities (MRF and SRF)
MRF and SRF; other Shared Equipment
1. Requirements for costing and charging Research Facilities
are defined in TRAC guidance (National requirement)
2. Charges for equipment/ facility usage relating to more than
consumables = SRF
3. Facilities/shared equipment not costed as MRFs/SRFs are
included in Estates rates for fEC
4. Annual exercise initiated by the TRAC Manager
MRF and SRF in Worktribe: 2 rates
Funding
Research Councils
AHRC, BBSRC, EPSRC, ESRC, NERC, MRC,
STFC
Part funding on project by project basis (RCUK, UK Government
Departments, NHS)
Part funded through QR Annual HEFCE block grant –
based on REF results
Some funding direct from Government departments
Dual Support
Government Funding
Research Councils fund:
80% of the Full Economic Cost of each grant (some
exceptions)
The remaining 20%:
made up in part via HEFCE REF block grant
Charity QR - income stream to supplement DI research income from UK Charity sponsors, but less than fEC, so still a gap in
cost recovery
Business QR - income stream to encourage industrial interactions
Government Funding
CGRF QR
Included in
mainstream QR
GCRF QR:
£0.8m
for 2017/18
to spend on ODA compliant activity
NEW
REF QR 2017/18
£16.8M
Charity QR
£1.3M
Business QR
£0.3M
From TAS to fEC via TRAC
Time Allocation Survey:
5 separate weeks (Nov, Feb,
March, May, July)
Half the university; alternate
years
Calculate proportion of time
allocated to 9 categories
FTE = Denominator
Academic time
Researchers
PGRs (weighted Estate
rate 0.5/0.8; Indirect 0.2)
Calculate total
(weighted) FTE on
census date in October
TRAC methodology
Separate presentation for
Time Allocation Survey
TRAC methodology Apportion R time (FTE) as identified in TAS
Total University “spend” on R
Double index = total cost of supporting research per
year, starting 1-2 years’ time
Divide by the FTE = cost per FTE per year
New November 2017: include forward looking costs
2 previous years + current year + 3 future years ÷ 6
Direct Costs
Project Costs available to
Principal Investigator
Estate Costs
Indirect Costs
Infra-structure Technician Costs (Lab Based only)
Non-direct costs
IDC Estates Infra-
structure Techs
Academic
Time
Research Staff Time
Research
Student
Time
Costs per FTE for each Category (Indirect, Estate and Background
(Infrastructure) Technicians
Let’s bake a cake!
(Exercise on
understanding
the costs)
Price
Less than cost
Same cost
Greater than cost
fEC recovery by sponsor type
Sponsor type Cost recovery expectations
Research Councils 80% fEC (exceptions, e.g. equipment)
Note: HEFCE provide QR funding to
supplement direct grant funding
Charities 100% direct costs plus maximum overhead
allowed within sponsor terms
UK Government departments 80% fEC minimum, must cover direct costs
EU commission 100% direct costs plus 25% overhead
Overseas
government/Education
In line with their standard terms, but must
meet 100% of direct costs
Industry IP Retained / Sold Not normally less than 100% fEC
RCUK pricing model
Direct costs (including 5% FTE staff time) £97,416
Indirect and estate costs, non-lab rate £2,584
Total £100,000
Funded at 80% £80,000
• shortfall on direct costs
• negative contribution
• re-cost or different funder
RCUK pricing model
Direct costs (including PI at 50% FTE time) 74,164
Indirect and estate costs, lab rate (+ technician) £25,836
Total £100,000
Funded at 80% £80,000
• positive contribution, but
• £100k max now taken mostly with salary and fEC
• Can the project be delivered?
H2020 pricing model
Direct costs (including PI at 5% FTE time) Euro
100,000
25% overhead 25,000
Total 125,000
Funded 125,000
• positive contribution
• Suitable call for this scale of project?
Checking cost recovery in Worktribe
University cost vs Funder price
Review cost vs price
handout
More information
Spring Symposium: Contracts & Tenders; VIP (VAT, Insurance and
Procurement)
TRAC https://www.york.ac.uk/staff/finance/transparent-approach-to-
costing/
fEC https://www.york.ac.uk/staff/research/external-
funding/applying/costing/fec/
RGC https://www.york.ac.uk/staff/research/external-funding/support-
contact-rsg/
Thank you