Cost Recovery and Pricing Guidelines
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1 Cost Recovery and Pricing Guidelines gui-001 To be read in conjunction with: Commercial Business Policy Version: 1.02 Last amendment: 03 Apr 2013 Next Review: Jul 2012 Approved By: Vice-Chancellor Date: 21 Jul 2010 Contact Officer: Director, Office of Research and Innovation All guidelines are intended to give further details to information contained in a particular piece of legislation, policy, code, agreement or procedure and must therefore be read in conjunction with them. INTRODUCTION Staff are encouraged to undertake Research, Consultancy and Fee for Service Activities when the work undertaken is likely to enhance the academic reputation of the individuals concerned or to promote positive relationships between the University and the community. The University will adopt practices that support the principles of competitive neutrality and that provide reasonable assurance that public funding received by the University is not used to gain a competitive advantage over the private sector through cross-subsidisation of activities. Adequate consideration will be given to staff capacity, capability and availability of resources prior to any commitment being made to a client or funding agency. Wherever possible, the full cost of an activity will be recovered in the price charged by the University to the client or funding agency. Where appropriate, the price charged will include a margin for reinvestment in the University. In cases where there may be unrecovered costs e.g. in collaborative research, these will be properly recognised as a University in-kind contribution to the activity. INTENT The intent of this document is to govern Research, Consultancy and Fee for Service Activities conducted through the University. This guideline applies to all University staff undertaking Research, Consultancy, or Fee for Service Activities. RELEVANT DEFINITIONS In the context of this document: ACG means Australian Competitive Grant; ARC means Australian Research Council; CRC means Cooperative Research Centre; Fee for Service Activity means any activity other than research and consultancy activities that are undertaken by the University for external clients and for which a fee is charged in exchange for the provision of a specified service; NHMRC means National Health and Medical Research Council; and Contact Officer: Director, Research and Innovation Page 1 of 6
2 Unrecovered Costs means the provision of any resource including, labour, equipment access, data, intellectual property, etc., for the research activity that is excluded from the price charged to the external funder. GUIDELINES The full cost of an activity, including all relevant direct and indirect costs will be recovered in the price charged to the client or funding agency. Any unrecovered costs will be recognised as an in-kind contribution of the University. Full-cost recovery includes: Direct Costs The direct costs associated with provision of the goods/services: Labour i.e. salaries plus salary on-costs (superannuation, payroll tax, workers compensation, etc.); and Materials and services consumed (i.e. equipment and maintenance costs, technical and administrative support, cost of stationery, office supplies, travel, copying and other consumables as necessary. Indirect Costs The indirect costs (i.e. infrastructure) associated with provision of the goods/services including, but not limited to: Capital costs: Laboratories, offices and other space; laboratory and office equipment and facilities; and other resources (including access to library, computing and information services); Central administration: Corporate Services; Service/maintenance: Electricity; phone; postage; depreciation; cleaning; building and equipment maintenance and refurbishment; and parking; Insurance: Professional Indemnity; Public Liability; Directors' and Officers'; buildings, property and equipment; and Financial: Raising and despatching invoices; accepting and processing payments; management reporting; costs of maintaining accounts; cost of preparing acquittals; audits. To compensate the University for infrastructure costs, the minimum charge to a client or funding agency will be as specified in the following table: Client Category Minimum infrastructure levy Notes Not for Profit Organisations See note To be determined in consultation with the Office of Research and Innovation on a case by case basis. Northern Territory Government 15% of direct activity costs Taking into account market conditions, a higher rate should be applied where appropriate. Other Government 20% of direct activity costs Taking into account market conditions, a higher rate should be applied where appropriate. Commercial 25% of direct activity costs Taking into account market conditions, a higher rate should be applied where appropriate. Contact Officer: Director, Research and Innovation Page 2 of 6
3 Example: Application for a Commonwealth Government Grant Salary Costs $10,000 Materials & Services Costs $10,000 Total Direct Costs $20,000 Minimum Infrastructure 20% $ 4,000 TOTAL BUDGET $24,000 The following types of research funding are exempted from the application of the infrastructure levy: Category 1 (ACG) research grants e.g. ARC, NHMRC; Category 4 (CRC) research grants where the University is a core partner of a CRC; Non-commercially oriented Student Scholarships and Project Costs; Cash contributions to National Competitive Grants e.g. Industry Partner funds provided for the purpose of leveraging ARC Linkage grants; Specialised Equipment valued at greater than $25,000, the ownership of which vests with the University; and Funds provided by Foundations & Charities (excluding funds provided by Foundations that have been established by companies to fund research in the field of their own commercial activities). Where appropriate, the price charged for an activity will include a margin for reinvestment in the University. Discretion to determine the margin for reinvestment lies with the relevant faculty Pro Vice Chancellor whose decision will be guided by what the market for the activity will bear. The price charged for activities where the University competes with the private sector for provision of the service, (e.g. in professional consulting, contract research or fee for service training) will normally include: Generally accepted professional fees for the staff member s time. Minimum daily rates provide reasonable assurance of no unfair advantage over the private sector from undercharging for professional staff time and use of University infrastructure and are outlined in the following table: Employment Level Daily Rate Academic Level E $1500 Academic Level D $1300 Academic Level C $1100 Academic Level B $ 950 Academic Level A $ 800 Technical/Support Staff $ 650 NOTE: These rates are inclusive of all on-costs and infrastructure levy. All other direct costs borne by the University in the conduct of the work; and An additional margin for reinvestment, where the market will bear it. Contact Officer: Director, Research and Innovation Page 3 of 6
4 Example: Academic Level D x 10 $1,300/day $ 13,000 Academic Level A x 60 $800/day $ 48,000 Technical Staff x 45 $650/day $ 29,250 Materials & Services Costs $ 35,000 Margin for Reinvestment $ 38,000 TOTAL BUDGET $163,250 Except with the approval of the Vice-Chancellor, Pro Vice-Chancellor, Research and Research Training or Executive Director, Corporate Services, the budget or price charged for an activity will be in accordance with the above pricing clauses and these guidelines. Responsibilities For all activities that will attract a payment to the University: The staff member must: Consult their Head of School/Cost Centre Manager when the activity is first being considered, and before making any commitment to the client or funding agency; Consult staff in the Office of Research and Innovation for advice on the budget and charge out price for activities. The Head of School/Cost Centre Manager must: Be satisfied the staff member has the capacity and capability to effectively undertake the activity relative to other priorities and commitments; Be satisfied the staff member has consulted with the Office of Research and Innovation as per information above. Be satisfied that where University resources need to be accessed, they are available; Ensure the relevant faculty Pro Vice Chancellor is consulted, as appropriate; and Ensure the activity is approved and undertaken in accordance with this and any other relevant University governing documents. Subject to prior consultation with the faculty Pro Vice Chancellor, the staff member will ensure other senior staff of the University are consulted about the activity, as appropriate. Distribution Direct costs will be reimbursed to the relevant cost centre where the expenditure is incurred. The infrastructure levy and margin for reinvestment will be distributed as follows: The first 5% charged on direct activity costs will be retained centrally and reinvested by the University in research and research scholarship; and The remainder will be shared equally between the faculty and the relevant cost centre. Contact Officer: Director, Research and Innovation Page 4 of 6
5 Example: Application for a Commonwealth Government Grant Salary Costs $10,000 Materials & Services Costs $10,000 Total Direct Costs $20,000 Minimum Infrastructure 20% $ 4,000 TOTAL BUDGET $24,000 This would be distributed as follows: Direct project costs to relevant cost centre $20,000 Infrastructure levy retained centrally $ 1,000 Infrastructure levy to faculty $ 1,500 Infrastructure levy to School/cost centre $ 1,500 TOTAL DISTRIBUTION $24,000 ESSENTIAL SUPPORTING INFORMATION Internal Commercial Business Policy Externally Funded Projects Approval Procedures Contact Officer: Director, Research and Innovation Page 5 of 6
6 Document History and Version Control Version Date Approved Approved by Brief Description July 2010 Vice-Chancellor Creation of original document and posting to CDU web site Jan 2012 Governance Minor changes to grammar and formatting. Change contact officer and removal of reference to VET NT Manager in line with new organisational chart Removal of reference to VET Academic categories in line with new EA. DVCRI changed to PVCRRT in line with new organisational chart Convert to new template Apr 2013 Governance Converted document to current template Minor changes to wording, grammar and formatting Assigned document number Updated and added hyperlinks Contact Officer: Director, Research and Innovation Page 6 of 6
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