CHANGE IN DIRECT COST LIMITATIONS ON SOLICITED APPLICATIONS 

RELEASE DATE:  April 30, 2004

NOTICE:  NOT-OD-04-040  (Superceded by NOT-OD-05-004)

National Institutes of Health (NIH) 
 (http://www.nih.gov/)

NIH announces a revision of its policy on direct cost limitations on 
solicited applications published after this notice.  Applications in 
response to those Program Announcements (PAs) and Requests for 
Applications (RFAs) that include a limitation on direct costs are to 
exclude from that limit the facilities and administrative (F&A) costs 
requested by consortium participants.  The F&A costs requested by the 
consortium will be reflected in the PHS 398 application according to 
current instructions, and F&A costs awarded under these programs will 
continue to be awarded under the current practice.  However, these 
consortium F&A costs will not be counted as a direct cost when 
determining if an applicant is in compliance with a direct cost 
limitation on a solicited application.     

As stated in NIH’s ROADMAP Research Teams of the Future, initiative, 
NIH recognizes the increased need for support of interdisciplinary 
research and research teams.  Programs that include a limitation on 
direct costs without the exclusion of consortium F&A costs create a 
disincentive to the establishment of consortiums, as the inclusion of a 
consortium’s associated F&A costs reduce the amounts which can be 
requested for other direct costs within a cost ceiling. This change 
will allow applicants for these programs to propose the necessary 
research teams via consortium arrangement without a negative impact 
their ability to fully utilize the direct cost limitations of the 
solicitation.

Please note that this does not change the NIH policy on the acceptance 
of applications requesting direct costs of $500,000 or more for any one 
year (see http://grants.nih.gov/grants/guide/notice-files/NOT-OD-02-004.html).
If you have questions on this Notice, please contact the Grants Management 
Specialist listed in the RFA/PA, or the Division of Grants Policy at
(301)435-0949.

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