Part I - Overview

Section A: General Overview

Implications for research sponsors in the public sector

38. Sponsors outside the public sector, or those who commission contract activity (not research) will continue to fund this on a basis other than fEC – perhaps using market or negotiated prices – as they currently do. HEIs will, however, be able to negotiate from a more informed position, as they can now calculate the fEC of the proposed work.
39. Research sponsors in the public sector should follow Government policy on how they price and fund research. An explanation of Government policy is given by the Office of Science and Technology.
40. These public sector sponsors who are now pricing on an fEC basis need to understand TRAC sufficiently to allow them to work through the implications for their own calls for bids and funding mechanisms. It does not require a comprehensive knowledge of TRAC (and should not therefore necessitate reference to the detailed TRAC guidance).
41. Sponsors of research in the public sector need to:
    • consider the implications for their budgets of (generally) the increased funding that is now requested on each research project. This may require a review of the volume of research they commission;
    • review each of their schemes to ensure that where they involve a grant for research work, they allow institutions to bid on an fEC basis, compliant with TRAC. Research Councils, for example, have had to re-design a number of their schemes which did not allow institutions to bid on an fEC basis^x;
    • understand TRAC at a level that will enable them to ask institutions for appropriate information (on applications and throughout the project) and to make decisions at project application on the basis of that information. They need to understand:
      • the type of academic and research staff who can be included in the costings (almost all);
      • whether fellowships are costed and funded on an fEC basis;
      • how Support time of academics is accounted for (in the indirect cost rate);
      • whether institutions can prepare costs that total less than 100% fEC (they cannot – although they can agree prices that are less than 100% fEC);
      • whether indexation is included (it is);
      • how indirect costs and estates costs are charged (using robustly calculated indirect cost rates and estates charges, but expressed in a variety of ways, depending on the method selected by the institution – see below);
      • that for a time HEIs with more effective accounting systems will have the potential to identify more costs as direct costs, thereby reducing their indirect cost rates, so that it will be, at the margins, more difficult for funders to compare ‘like with like’;
      • how TRAC avoids double-charging, for example: for equipment that was originally funded on research grants; for equipment funded through the Science Research Infrastructure Fund (SRIF); for staff who already charge 100% of their time to a fellowship; for maternity pay of academics;
    • amend their calls for applications; their processes for reviewing applications; and their terms and conditions of grant;
    • consider quality assurance and validation issues.