July 12, 2017


SUBJECT:   : IMPORTANT – Federal F&A/IDC Impact

Dear Faculty Colleagues,

On behalf of UC San Diego Chancellor Pradeep Khosla and academic/research leadership, I urge you to consider the potential impact that an alarming proposal being discussed in Washington D.C. could have on our vibrant billion dollar research enterprise.

The White House Office of Management and Budget (OMB) and the U.S. Department of Health and Human Services (HHS) have proposed that NIH’s budget could be dramatically reduced by slashing facilities and administrative (F&A) cost reimbursements to universities. They have proposed to cap the indirect cost recovery (F&A) at 10% which could apply to all federally sponsored research, not just NIH. Our current federal F&A rate is 55%.

What is at risk for you with such reduced F&A reimbursement? Currently, UC San Diego receives F&A reimbursement of approximately $210 million for the research we conduct. These monies are distributed to Health Sciences, General Campus and Scripps Institution of Oceanography and cannot be replaced by tuition increases, or restricted foundation, endowment or state funds. F&A money helps pay for laboratories, physical, and administrative services, cost sharing in contract and grant applications, lab facility renovations, faculty start up and retention packages, benefits, graduate student tuition subsidies and more. Almost every aspect of Central and Dean support for your research would be seriously limited and faculty salaries would be adversely affected in both the short and long term. Substantially less money would be distributed across campus to the Vice Chancellors, Deans, Department Chairs and faculty members if this drastic cut were imposed.

There are three important points to know:

- UC San Diego values you and the cutting edge research you and your teams conduct. We are committed to providing you with a workplace that supports and sustains your research.

- Overall, 65% of UC San Diego’s research funding comes from the U.S. Government.

- American universities and the U.S. government have had a research partnership for over 70 years designed to jointly support basic and applied research, meet national needs, foster innovation, create American jobs, and ultimately improve the quality of life for Americans.

This successful partnership is possible and has endured in part because of the fair coverage of direct and indirect (F&A) costs of conducting our world-class research.

We are working to ensure that our elected officials understand the impact of the proposal to cut reimbursement for our F&A costs. I will keep you appraised of changes in the federal policies as they unfold and welcome your thoughts and efforts to address this challenge.

Click here to see F&A: Please check back regularly for additional information on this important topic.


Sandra A. Brown
Vice Chancellor for Research