Indirect Cost, also referred to as Facilities and Administrative Costs, means costs that are incurred for common or joint objectives and therefore, cannot be identified readily and specifically with a particular sponsored project, an instructional activity, or an any other institutional activity. Indirect cost is taken on all Modified Total Direct Cost (MTDC), which, as defined in OMB Circular A-21, consists of salaries and wages, fringe benefits, materials and supplies, services, travel and subgrants and subcontracts up to the first $25,000. Excluded from the base for indirect cost are equipment, tuition and service center costs (publications, vessels, and analytical services).

Computation. Indirect cost is computed by multiplying the MTDC by the indirect cost rate.

Reduced indirect cost must be approved in advance by the Director of Research and Advisory Services.