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<p class="MsoNormal">Hi Milan – I actually want to echo what you heard from your administration. A few years back when the uniform guidance replaced the OMB circulars, I went to a conference for University Administrators and asked about the cap. The general
agreement was that the cap is not OK. At that time I also saw caps as an issue in our center and we had already started the process to get rid of caps (lower rates and now we are also providing a discount for off-peak usage). It seems to me that our community
is pretty unique in providing capped fees. There are lots of other ways to provide discounts for heavy usage. For example, a reduced rate after certain volume is something that could come close to a cap for a PI.
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">In the example mentioned below, you would need the institutional subsidy to pay directly for the overage fees incurred (charge user account up to cap and charge subsidy account beyond cap). I do not think that it is ok to simply say that
there is a subsidy and it makes up for the cap. Also be aware how you apply an institutional subsidy. We get an institutional subsidy of ~10% for our operations. However, we do not apply that subsidy to our service center but instead move some costs (mainly
5-10% of each staff member) off from the service center and charge our operating budget directly. This would not immediately be a recognized as a subsidy when you are submitting your rate package for approval.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Cheers, <o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><span style="font-size:10.0pt">Tobi</span><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt">Tobi Beetz, Ph.D., Associate Director, Stanford Nano Shared Facilities, Stanford University </span>
<o:p></o:p></p>
<p class="MsoNormal"><span style="font-size:10.0pt">348 Via Pueblo, Spilker Building, Room 105, Stanford, CA 94305-4088, 650-644-9541,
<a href="http://snsf.stanford.edu/"><span style="color:#0563C1">http://snsf.stanford.edu</span></a></span><o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><b>From:</b> labnetwork-bounces@mtl.mit.edu <labnetwork-bounces@mtl.mit.edu>
<b>On Behalf Of </b>Ian Harvey<br>
<b>Sent:</b> Sunday, September 29, 2019 2:27 PM<br>
<b>To:</b> Begliarbekov, Milan <mbegliarbekov@gc.cuny.edu><br>
<b>Cc:</b> labnetwork@mtl.mit.edu; Alu, Andrea <aalu@gc.cuny.edu><br>
<b>Subject:</b> [labnetwork] Fwd: Question about the legality of caps<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">Hi Milan, <o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal">To piggyback on Noah’s note, the other key term is “subsidy”. The point of all the legal maneuvering is to keep the federal government research grants from subsidizing others’ research activities. From the A-21 circular:<o:p></o:p></p>
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<p class="MsoNormal"><o:p> </o:p></p>
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<p class="MsoNormal"><i><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"> "Each institution's F&A cost rate process must be appropriately designed to ensure that Federal sponsors do not in any way subsidize the F&A costs of other sponsors, specifically
activities sponsored by industry and foreign governments."</span></i><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">**However, it is perfectly ok for federal research grants to be subsidized by the institution.**<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">In other words, if you set your rates (including ubiquitous caps) in such a way that it is clear the deficit between lab expenses and revenue is covered by the
<i>institutional</i> subsidies, then you are good with the Feds even while you get deeper under scrutiny from the accountants within your own institution who wonder why it is so expensive to operate such facilities.<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">yes, good luck,<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">—Ian Harvey<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Princeton University<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Begin forwarded message:<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">From:<span class="apple-converted-space"> </span></span></b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Noah Clay <<a href="mailto:nclay@upenn.edu"><span style="color:#954F72">nclay@upenn.edu</span></a>><br>
<br>
<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Subject:<span class="apple-converted-space"> </span>Re: [labnetwork] Question about the legality of caps</span></b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><br>
<br>
<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Date:<span class="apple-converted-space"> </span></span></b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">September 28, 2019 12:25:05 AM EDT<br>
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<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">To:<span class="apple-converted-space"> </span></span></b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">"Begliarbekov, Milan" <<a href="mailto:mbegliarbekov@gc.cuny.edu"><span style="color:#954F72">mbegliarbekov@gc.cuny.edu</span></a>><br>
<br>
<o:p></o:p></span></p>
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<p class="MsoNormal"><b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Cc:<span class="apple-converted-space"> </span></span></b><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">"<a href="mailto:labnetwork@mtl.mit.edu"><span style="color:#954F72">labnetwork@mtl.mit.edu</span></a>"
<<a href="mailto:labnetwork@mtl.mit.edu"><span style="color:#954F72">labnetwork@mtl.mit.edu</span></a>>, "Alu, Andrea" <<a href="mailto:aalu@gc.cuny.edu"><span style="color:#954F72">aalu@gc.cuny.edu</span></a>><br>
<br>
<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Hi Milan,
<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Federal Circular A-21, I believe, is the de facto document for such matters. Visit this link and search for “Applicable Credits”, pages 12-13, sections 5a and 5b<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif"><a href="https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A21/a21_2004.pdf"><span style="color:#954F72">https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A21/a21_2004.pdf</span></a></span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">My takeaway is that caps (“discounts, rebates, allowances”) are allowable. The NIH guideline snippet in your original email points to handling cap abuse (“a heavy user”)
and may apply more specifically to an NIH core. As written, it requires definition of a cap abuse threshold and an internal recharge mechanism. I like the intent/spirit of this.</span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">Lastly, as far as I know, all federal funding granted to an educational institution must be charged uniformly. So, an NIH grant can’t be charged differently than an NSF
grant.</span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">Good luck,</span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">Noah Clay</span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">University of Pennsylvania </span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:12.0pt;font-family:"Helvetica",sans-serif">Philadelphia, PA</span><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><o:p> </o:p></span></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">Sent from my iPhone<o:p></o:p></span></p>
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<p class="MsoNormal" style="margin-bottom:12.0pt"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif"><br>
On Sep 27, 2019, at 15:34, Begliarbekov, Milan <<a href="mailto:mbegliarbekov@gc.cuny.edu"><span style="color:#954F72">mbegliarbekov@gc.cuny.edu</span></a>> wrote:<o:p></o:p></span></p>
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<p class="MsoNormal">Dear All,<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal">At CUNY some of our administration is questioning the legality of capping user fees. After pointing out that this is a ubiquitous practice for all nanofabs, the administration informed us of the following NIH guideline, in particular this
paragraph:<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="regulartext" style="margin-bottom:7.5pt"><strong><span style="font-size:10.0pt;font-family:"Helvetica Neue";color:#333333">g. Can fee schedules cap the amount charged to a user in a particular time period?</span></strong><o:p></o:p></p>
<p class="regulartext" style="margin-bottom:7.5pt;text-align:start;word-spacing:0px">
<span style="font-size:10.0pt;font-family:"Helvetica Neue";color:#333333">Generally, no. Fee schedules that cap charges at a certain dollar amount per month if more than a certain number of hours or units are used are not consistent with applicable cost principles
unless the institution or some other non-Federal funding supports the difference between the allocable cost and the amount charged to a heavy user. If appropriate for a particular facility, it may be possible to create fee schedules that have different charges
depending on timing and level of usage as long as the charges are determined and consistently applied in accord with applicable Federal cost principles.</span><o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal">In principle none of our users are NIH funded, but I’m wondering if you ever heard of such a guideline, and if so, how does it impact your operations.<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal">Thank you as always,<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal">Milan<o:p></o:p></p>
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<p class="MsoNormal"> <o:p></o:p></p>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">_______________________________________________<br>
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<p class="MsoNormal"><span style="font-size:9.0pt;font-family:"Helvetica",sans-serif">_______________________________________________<br>
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