During the NIH SBIR Conference in Louisville Kentucky this past week, Edward Jameson gave a spirited presentation regarding SBIR Accounting, and the importance of negotiating Indirect Rates on the Phase II of an NIH Award. As we always harp at our firm, taking the Provisional 40% F&A rate you receive at Phase I, and carrying it over to Phase II is one of the most common, and most crucial mistakes Government Grantees make. We outline this several times throughout our website, during our webinars, and detailed in our SBIR Whitepaper and our Top 10 Accounting Mistakes article, available for download at our website.During the Q&A session of Ed’s presentation, a grant specialist from NCI spoke up and challenged that the 40% rate is hard capped, and becoming the defacto rate for all grantees at NCI across the board. Though we know that some departments under the NIH umbrella have hard caps (NIAID), the vast majority do not, allowing Phase II Awarded Small Businesses the opportunity to negotiate their F&A Rate above and beyond the 40%. There was some confusion on where she received that information and whether that was indeed fact or opinion. At the conclusion of the presentation, the grants specialist approached Ed to discuss her perspective, but after all was said and done, she was incorrect in her assumption and apologized for the confusion.
To clear up the matter further, Dr. Matthew Portnoy addressed the attendance of the NIH SBIR Conference on Thursday May 31st, and clearly announced that Phase I Grantees may take up to a 40% F&A Rate, and that rate negotiations are not performed at Phase I. At Phase II however, 40% is still available as a provisional rate, but negotiations for F&A Rates above 40% are not only available during this period, but also recommended.
If you have any questions regarding this, by all means contact our own office, or discuss with an appropriate NIH correspondent. You can gather more information at http://grants.nih.gov
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