The University of Montana supports a significant number of recharge facilities - both research and non-research - which provide fee-based services to the campus community.
Specialized service centers typically have several customers (e.g., more than five):
- internal UM users (e.g., institutional funds, federal and non-federal grants and contracts, and other sources of funds administered by UM), and
- non-UM customers.
Some UM recharge facilities are laboratory-based core facilities, but a variety of non-research centers also exist. Montana Board of Regents Policy 1909 - Competition with the Private Sector directs that all such activities:
- must substantially support the teaching, research, or outreach mission of the University, and
- are reviewed annually to ensure the pricing of good/services is not focused on the generation of income and, conversely, does not unfairly compete/undercut the private sector.
Such facilities must:
- be fiscally-administered in discrete cost accounts, such as Designated sales & service accounts, in order to ensure consistent application of rate reviews and bill processing; and,
- conduct and document regular rate and performance reviews to ensure that all recharge facilities provide needed services to the campus community at costs that are competitive to - but do not undercut - external providers, and meet any additional requirements or regulations as appropriate.
- Develop a pool of all direct costs and associated indirect costs (at the organized research rate) the center will expense for completion of the service(s)(salaries/benefits, supplies, other consumables). Include all purchasing costs so that the true cost of doing business is captured.
- Depreciation on equipment is not an allowable cost at UM because it is not UM practice to internally expense depreciation.
- Ensure that a comparable service is not available at UM at a lower rate.
- Costs paid directly by federal support may not be included in rate calculations.
- Track actual usage by project, not by PI.
- Develop and publish two separate price schedules based on actual usage (past and projected); one schedule must incorporate indirect costs, the other must exclude indirect costs. Services provided to sponsored programs (grant indexes) must use the preferred, lower price schedule which excludes indirect costs. All other service activity must use the price schedule which incorporates indirect costs.
- Example: Estimated costs(less direct federal support,if applicable) / estimated number billable units = Price per service/item.
- Invoice for all use, internal (grant and non-grant) and external alike, via an aggregate per item/service cost:
- Avoid anything "annual" (fees, charges, maintenance, etc.) as this descriptor is ambiguous and lends itself to audit scrutiny.
- Avoid terms like Hosting, Maintenance, or Repair which indicate that this is a payment made to entities outside UM when, in fact, they are simply UM costs.
- UM is not allowed to make a profit, recoup the cost of equipment, or fund the acquisition of new equipment.
The costs associated with use of a recharge facility must be allocated on a consistent basis for all users and no external user may be charged a lower rate than an internal user paying via a federal grant, contract, or cooperative agreement. Thus, once the cost pool is developed and an aggregate per service/item fee is established, there should be a rate schedule published or otherwise available upon request for all users of a specified service.
Sponsored Program Use
Users from a sponsored program must be charged the preferred rate which excludes indirect cost recovery.
General or External Users
All other users must be charged the higher rate, which includes indirect cost recovery:
- ensure that federally funded internal users (grant, contract, cooperative agreement) are not charged more than external users; and
All recharge center at activity is subject to BOR Policy 1909, including regular review to evaluate whether the center is in direct competition with the private sector and is leveraging its inherent advantages as a non-profit university to gain market share..
In situations where UM facilities would otherwise sit idle, incremental cost recovery may be desirable even if allowable F&A is not fully recovered from external users. Many University facilities carry fixed overhead costs that will be incurred regardless of how a facility might be used with an external customer base. In these rare situations with external users, units are allowed to partially recover F&A costs when the methodology is sufficiently documented.
Documentation and justification for rates paid by all users must be reviewed annually by ORCS, adjusted for projected use as necessary, and available upon request.
Recharge activities can neither be designed to generate revenue nor unfairly compete with the public sector, and must substantially support UM's teaching, research, or outreach mission.