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F&A Bases (TDC, MTDC)

Base: The F&A rate is applied to a base of direct costs in order to determine the F&A cost which can be calculated in one of the following ways:

  • TDC base = Total Direct Costs. All direct costs are included. There are no exclusions or modifiers. F&A cost = TDC base x F&A rate.
  • MTDC base = Modified Total Direct Costs. TDC minus equipment, patient care, tuition, participant support costs, rental costs of non-UF owned facilities, space, or other property, scholarships, fellowships, and the portion of each subaward in excess of $25,000. F&A cost = MTDC base x F&A rate.
  • TFFA base = Total Federal Funds Awarded. For USDA or various other sponsor proposals, the F&A is considered to be on the full amount of the award, which is actually calculated using TDC

If the solicitation specifies a rate other than the federally negotiated rate, unless otherwise indicated TDC should be used as the F&A base.

To calculate the TFFA, use the following TDC examples:

  • 15% TTFA is equivalent to 17.647% TDC
  • 22% TFFA is equivalent to 28.20513% TDC
  • 30% TFFA is equivalent to 42.857% TDC

How does 30% of TFFA equate to 42.857% of TDC?

The Request for Application (RFA) limits indirect cost reimbursement to 30 percent of TFFA which is equivalent to 42.857 percent of the TDC.

How does 30% of TFFA equate to 42.857% of TDC?

You can convert 30% of Total Federal Funds Awarded (TFFA) to Total Direct Costs (TDC) as follows:

  • Allowable indirect costs = 0.30 TFFA
  • Direct costs = 0.70 TFFA
  • 0.30 TFFA / 0.70 TFFA = 42.8571%

Please note that for preparing budgets for USDA grants with TFFA F&A limitations, the recovery of indirect costs is limited to the lesser of the institution’s official negotiated indirect cost rate or the equivalent TDC rate of the appropriate TFFA. 

To determine which rate to charge you will need to calculate both and use the lesser of the two. If there are no exclusions (i.e. equipment, tuition, subcontract amounts greater than 25k), the TDC-converted TFFA rate is usually going to be less than the University’s federally negotiated rate. If you have significant exclusions in your budget, it is likely that the University’s federally negotiated rate will be less. The only way to determine this is to calculate the budget both ways and use the F&A calculation that results in the lower amount.

For TFFA-limited opportunities the USDA includes the indirect cost amounts of both lead and subaward institutions when determining the total indirect costs allowed for an award. This means that additional calculation will be necessary to ensure correct indirect cost recovery is achieved for all institutions involved in proposals to TFFA-limited opportunities.

If a proposal with subawards is still over the TFFA limitation even when all institutions are using their lowest-yielding F&A calculation, the rates being used will need to be manually adjusted. That is, if each institution is using the lesser F&A calculation of either their federally negotiated rate or the TDC-converted TFFA rate, but the total indirect cost for the proposal is still over the TFFA limit, the F&A base that each institution is using will stay the same but the rate applied to it must be decreased until the total F&A calculation falls under the TFFA limit. The necessary rate reduction should be equitably split between all of the institutions involved in the application. For this reason it is strongly suggested that lead and subaward institutions calculate their total proposal budget far in advance of proposal deadline so that the necessary calculations can be made.

Proposal guidelines for the Florida Department of Health (FDOH) often have language that also states that the indirect costs of subawards are included in the overall indirect cost amount of the award.  Most frequently, the rate is 15%, and in UFIRST you select the indirect cost type “TDC less Subcontracts.”  In this way, UFIRST will only calculate indirect costs on UF’s direct costs. This calculation differs from that of the USDA in that FDOH uses a set TDC rate rather than the USDA’s use of the lesser of TFFA amounts.