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1.0 Purpose and Scope

This procedure aims to support sustainable research and consultancy activity at the University of Queensland (UQ or the University) through the appropriate and transparent pricing of research contracts as well as the consistent internal distribution recovery of the costs incurred by undertaking a research or consultancy project.

This procedure aligns with:

Administration of Research Funding: Applications, Grants and Contract Research Policy,

Contract Research and Grants Financial Management Procedure,

Consultancy, Secondary Employment and Internal Work Policy, and

Consultancy Procedures.

This procedure specifies:

• The components of pricing:

o Direct Costs (section 3.1);
o Indirect Costs (section 3.2);
o Margin (section 3.3) and

• The pricing of academic salaries as in-kind.

• The distribution of indirect costs.

Research grants, contract research and consultancy activity funded by an external body and managed through UQ or a University controlled entity are collectively referred to as ‘Projects’ throughout this procedure.

2.0 Process and Key Controls

1. The costing and pricing of contract research and consultancy projects must be calculated using the UQ Costing and Pricing Tool.

2. The costing and pricing of research grants should be calculated, wherever possible, using the UQ Costing and Pricing Tool.

3. The University will seek to price projects so as to recover, as a minimum, all direct costs and indirect costs from project funds where permitted by the Funding Provider.

4. Consultancy work and contract research should be in line with market prices to reflect the value of University services.

5. Budgets and expenditure must comply with the specific rules and guidelines set by the funding provider and UQ policies and procedures.

6. Project budget (costing) development guidance for projects can be found in the Contract Research and Grants Financial Management Procedure and the Consultancy Procedure.

3.0 Key Requirements

3.1 Direct Costs

Direct costs are either directly incurred costs or directly allocated costs specific to the project work and must be directly related to achieving the objectives and outcomes of the project. Direct costs include:

1. Personnel costs;

2. Scholarships;

3. Equipment;

4. Consumables/maintenance;

5. Travel;

6. Hospitality;

7. Collaborative payments

8. Subcontracts; and

9. Other.

3.1.1 Personnel costs

Personnel costs for consultancy and contract research projects must include an appropriate proportion of the full-time equivalent (FTE) of any staff member engaged in the work, regardless of where that salary cost is funded from. This includes academic (CI) salaries. Multi-year projects should allow for annual increments.

When costing projects, applicants must include salary on-costs for any salary items included in the budget. The components of UQ salary on-costs are workers’ compensation, payroll tax, employer superannuation, and leave provisioning. On-costs are automatically calculated within the UQ Costing and Pricing Tool.

• Personnel costs must also include anticipated overtime if any person eligible for overtime will be required to work on the project outside or in excess of normal working hours. Overtime is subject to on-costs.

• Personnel costs must also include any salary loadings that are applicable to the staff member.

3.1.2 Scholarships

Scholarship costs may include stipends and allowances of any person funded for a higher degree by research scholarship or other scholarship to work on the project. Scholarship tuition must be costed or a tuition fee scholarship awarded by the Graduate School. Scholarship costs, including stipends, tuition fee and allowances are not subject to salary on-costs (workers’ compensation, payroll tax, employer superannuation and leave).

3.1.3 Equipment

The purchase, use, transfer and disposal of equipment using research funds must be in accordance with the Property, Plant and Equipment Procedure and the relevant funding rules or agreement.

3.1.4 Consumables/maintenance

Maintenance includes consumable items or services that are essential for the conduct of the project. Consumable costs may, but are not limited to, include expendable materials and supplies, glassware (other than equipment), the purchase and agistment of laboratory animals and subscription charges for specialised services.

3.1.5 Travel

Travel costs include eligible fares, kilometric reimbursement, accommodation and subsistence for travel and fieldwork to be undertaken in the course of the project. Where permitted by the funding provider, travel may include attendance at conferences.

All travel must be conducted in line with the University Travel Management Policy.

3.1.6 Hospitality

Hospitality generally includes:

• the provision of meals and beverages (regardless of whether it is considered to be entertainment);

• the provision of tickets to sporting events, cultural events and other functions;

• the provision of travel and overnight accommodation; and

• any costs incidental to the provision of the above such as venue hire and transport costs (such as taxi charges and bus hire).

Hospitality costs must be in accordance with the Hospitality Policy and Procedure.

3.1.7 Collaborative payments

Collaborative payments occur when the University has agreed to collaborate with another institution on a research project, through a Collaborative Research Agreement (CRA) or Multi-Institutional Agreement (MIA). Collaborative payments must be in accordance with the Contract Research and Grants Financial Management Procedure.

3.1.8 Subcontracts

A subcontract is where a part of a project is performed for a fee by parties outside of UQ.

Staff (or external entities controlled by staff) are not permitted to be engaged and paid by UQ, directly or indirectly, under a subcontract or consultant agreement and are not permitted to charge their services to a project as an individual consultancy fee. University staff involved in a project across organisational units should be included in Section 3.1.1 Personnel costs.

The preferred method of apportionment of project income between UQ staff across organisational units is the Split Site Funding method where separate financial project accounts are created.

University equipment or research infrastructure is utilised on a fee for service basis in accordance with Section 3.1.9 Other, and is not considered a subcontract.

3.1.9 Other

Other costs may include those not already covered by the direct cost categories above, these may include, but are not limited to:

• The use of both centrally managed and local equipment, research infrastructure and laboratories should be charged internally on a fee-for service basis;

• Eligible relocation expenses for a new appointee to relocate and take up a research staff position on the project at the relevant University campus;

• Publication and dissemination costs;

• Facilities access and subscription charges.

3.2 Indirect costs

Indirect costs (overheads) are those incurred by the University in supporting a project, but which cannot be directly attributed to individual projects. Provision and maintenance of services, facilities and infrastructure are substantial costs to the University and should be recovered through the project pricing.

Indirect costs include, but are not limited to:

• Space;

• Information technology;

• Administration, security, legal, accounting and insurance;

• Utilities such as water, gas, electricity; and

• Libraries, laboratories, research facilities and other resources.

The minimum Indirect Cost Recovery Rate for research and consultancy funding will be calculated as:

• 40 per cent of total actual direct costs, excluding scholarship costs (section 3.1.2) (equivalent to using a price multiplier of 1.4 x total direct costs).

Indirect costs are not applied to Academic Consultancy, and Teaching Consultancy Type B.

For projects with collaborators, UQ should only retain and distribute the University’s portion of indirect costs.

Scholarship costs (section 3.1.2), including tuition fees, stipends and personal allowances of any person funded for a higher degree by research scholarship or other scholarship to work on the project are not subject to indirect costs.

3.2.1 Variations to the indirect cost recovery rate

Approved variations to the minimum indirect cost recovery rate for research funding from grants and contract research with non-commercial entities are:

• Specific funding providers of research grants may stipulate rules on indirect cost recovery that differ from the UQ indirect cost recovery rate under this procedure. The maximum allowable indirect cost rate in line with the funding rules must be recovered. 

• Where the funding provider offers an indirect cost recovery rate higher than UQ’s, then the higher rate must be charged. 

• A reduced indirect cost recovery rate may be applied to competitive projects from some international competitive funding bodies, and other non-commercial funding bodies.

• A list of existing approved variations is available here.

• No variation to the indirect cost recovery rate to apply to consultancy projects or contract research with commercial entities.

Variations to the indirect cost recovery rate will only be considered on a project-by-project basis by the Deputy Vice-Chancellor (Research) for new strategic research collaborations of significant value (normally over $5 million), or where other exceptional circumstances requiring University co-investment can be demonstrated.

3.2.2 In-kind

In instances where the indirect cost recovery rate of the funding provider is less than the UQ minimum indirect cost recovery rate, the difference may be considered in-kind contribution by the University. This can be included in the UQ Costing & Pricing Tool if appropriate.

3.3 Margin

The University is a provider of high quality and high value services and prices should reflect this position. Wherever possible, staff must price consultancy work and contract research in line with market prices, thereby recovering a margin on the project. The market price and related margin, should be adjusted in line with factors such as market competition, the provision of intellectual property, risk, and the uniqueness of the expertise, infrastructure or personnel.

The Consulting and Research Expertise unit (CoRE) can provide advice and assistance as required to develop the project budget and assist with market pricing of consultancy projects. Research Partnerships Managers and Innovation Brokers are available to assist with commercial pricing of contract research.

3.4 Pricing of academic (CI) salaries as in-kind

The University has a strong preference that direct costs, including academic (CI) salaries incurred in the delivery of contract research should be fully priced into the contract. 

If academic (CI) salaries are priced into the contract, the resulting surplus from salary funds are available to be directed to the Chief Investigator’s Academic Consultancy and Award (ACA) account for use on other research activities, subject to the discretion of the Level 5 Authorised Officer (or above).  This excludes contract research undertaken by the Sustainable Minerals Institute and Institute for Social Sciences Research. An example of when CI salary would not be directed to the ACA account, is where the research contract requires a substantial time commitment from the CI and the line manager has formally agreed to release the CI from other duties (such as a multi-year contract for an externally funded research centre).

Under limited conditions, academic (CI) salaries may be priced as in-kind with Level 5 Authorised Officer (or above) approval. When considering pricing academic (CI) salaries as in-kind, the loss of UQ funds should be assessed against: criticality of the project to the CI’s career, UQ’s strategic objectives, and the partner’s genuine ability to pay.

Academic (CI) salaries must be fully priced in the contract for Consultancy projects.

For any projects with UQ in-kind contributions, the detailed composition of in-kind contributions should be included in the UQ Costing & Pricing Tool.

3.5 Distribution of indirect costs

The requirement for distribution of indirect costs for consultancy contracts depends on the categorisation of the projects based on nature, size and definition.  For consultancy contracts, these principles are set out in the Consultancy Procedure.

For consultancy and contract research projects with direct costs less than $10,000, indirect costs are not distributed, and the resulting surplus is retained in the Academic Consultancy and Award (ACA) account of the Chief Investigator for use on other research activities.  For all other research projects, distribution of indirect costs occurs as detailed below.

3.5.1 Projects managed through the University

For all University-managed research projects and those consultancy contracts subject to indirect cost distribution, the indirect costs recovered are distributed as follows:

• 20%: Primary faculty/institute

• 20%: Secondary faculty/institute/school/centre/research group allocation - distributed according to local priorities and practice.

• 60%: Central University

3.5.2 Projects managed through University Commercialisation Companies

Any research and consultancy contracts that have a direct connection to a commercialisation activity being carried out by the University commercialisation companies, must be managed by these University commercialisation companies.

Projects that do not meet any of the above criteria are managed through the University by default (refer section 3.5.1).

For all research projects managed by a University commercialisation company, the recovered indirect costs are distributed as follows:

• 20%: Primary faculty/institute

• 20%: Secondary faculty/institute/school/centre/research group allocation - distributed according to local priorities and practice.

• 60%: University commercialisation company

3.6 Transitional arrangements

All existing agreements and contracts with external parties signed and commenced prior to 1 May 2020 may continue under the existing arrangements until completion of the existing contracts.

If a proposal, including budget, has been sent to the external party, but where contracts are yet to be signed, a different overhead rate that may have been negotiated/agreed with the external party may proceed with approval of either the Director Research Partnerships, Director Office of Sponsored Research, or Director of CoRE as appropriate.  Evidence of the communication of the indicative budget to the external partner may be requested.

Where a variation is required to an existing contract dated prior to 1 May 2020, the conditions under which the contract was signed may be extended into the variation.  Such a variation is permitted only once for each contract, and:

• must be requested before the end of 2020, and

• may not extend the existing contract by more than 12 months

Where organisational units undertake Type 1 Standard Consultancy, existing indirect cost arrangements with current clients may continue until the end of 2020.

4.0 Roles, Responsibilities and Accountabilities

4.1 Deputy Vice-Chancellor (Research)

The Deputy Vice-Chancellor (Research) is responsible for approving changes or review of this procedure or related documents.

The Deputy Vice-Chancellor (Research) retains discretion for strategic research contract pricing approval for contracts in accordance with this procedure.

4.2 Office of Sponsored Research

The Office of Sponsored Research is responsible for:

• Maintaining the list of approved variations to the minimum indirect cost recovery rate, and

• Maintaining the UQ Costing and Pricing Tool with input from CoRE.

• Reviewing pre-award or pre-agreement research grants for compliance with relevant funding rules and with this procedure.

4.3 Consulting and Research Expertise unit (CoRE)

The Consulting and Research Expertise unit is:

• Available to assist staff in determining costing, developing budgets and negotiating market prices for consultancy contracts.

• Responsible for reviewing consultancy budgets (for Type 2 consultancy in accordance with the Consultancy Procedure) for reasonability and compliance with this procedure.

4.4 University commercialisation company

The University commercialisation company is responsible for managing research and consultancy contracts that have a direct connection to a commercialisation activity that they are carrying out. Accordingly, for such projects, the University commercialisation company is:

• Available to assist staff in determining costing, developing budgets and negotiating market prices for consultancy contracts.

• Responsible for reviewing projects for reasonability and compliance with this procedure and the Consultancy Procedure.

4.5 Research Partnerships Managers and Innovation Brokers

Research Partnerships Managers and Innovation Brokers are responsible for:

• Providing researchers with advice on budgets for contract research using the UQ Costing and Pricing Tool and ensuring compliance with this procedure.

• Discussing pricing with a potential industry partner.

4.6 Researchers and Project Leaders

Staff responsible for undertaking research and consultancy projects are responsible for:

• Making all reasonable attempts to identify all direct costs and utilising the UQ Costing and Pricing Tool wherever possible, to avoid project overspend and possible under-quoting of projects, and to make budget estimates as accurate as possible;

• Enlisting the help of Office of Sponsored Research, CoRE, Research Partnerships Managers, Innovation Brokers, Finance Advisory Professional Services Team, and other research administrative support staff to assist in budget development and pricing. Utilising the established UQ processes and the services of the Research Partnership Managers and CoRE to negotiate research and consultancy contracts.

Ensuring project budgets and expenditure comply with specific rules set by the funding provider and relevant University policies and procedures.

5.0 Monitoring, Review and Assurance

The Deputy Vice-Chancellor (Research) is responsible for continuously monitoring the effectiveness and application of this policy. The Deputy Vice-Chancellor (Research) is responsible for the annual review of the indirect cost recovery rate.

6.0 Recording and Reporting

Wherever possible, all budgets for research and consultancy should be established and documented in the UQ Costing and Pricing Tool.

The financial results and distribution of indirect costs relating to research and consultancy projects are recorded in the UniFi Financial System.

7.0 Appendix

7.1 Definitions

Academic (CI) salary - salary of the primary/ chief investigator academic staff member (including on-costs & market loading).

Consultancy - entails the procurement/ acquisition by external organisations of (a) skills and expertise of University staff and/or (b) access to University resources, equipment or facilities to work on a specific project with a specific end objective. It includes, without limitation professional services, expert opinion, advice, analysis, product development, product testing, general testing services, process development, and delivery of programs and courses to non-enrolled students. Where applicable, the external client would expect to own any intellectual property arising from the paid consultancy.

Consultancy can be generally defined as the provision of professional services based on existing knowledge. Work with external organisations that might result in the “creation of new knowledge and/or the use of existing knowledge in a new and creative way so as to generate new concepts, methodologies and understandings” is defined as Research.

Contract price - the total amount charged to industry partners or customers for undertaking contract research or consultancy activities.

Contract research - research commissioned by or negotiated with a funding provider.

Funding provider - a party providing research funding, including but not limited to government, commercial, or other external entities.

In-kind - non-cash costs (direct and indirect) contributed by UQ (often the Chief Investigator salary costs and related indirect costs), and not included in the customer price.

Margin - the amount above direct costs and indirect costs that a commercial contract may be able to attract based on market forces. Details in Section 3.3 of this procedure.

Market price - the commercial contract price that a consultancy or contract research project is able to command.  The appropriate market price is influenced by many factors such as competition, the provision of intellectual property, risk, and the uniqueness of the expertise, infrastructure or personnel.

Market Price = Direct Costs + Indirect Costs + Margin.

Projects – collective term for research grants, contract research and consultancy.

Research grants - research activity(s) that is funded in response to an application into a competitive process that includes established rules and governance for the funding scheme. The funding provider of a research grant would not normally be a direct beneficiary of the research.

University commercialisation company

a. JKTech Pty Ltd; or

b. UniQuest Pty Ltd.

UQ Costing and Pricing Tool - this tool calculates direct costs, indirect costs and margin in line with this procedure, and personnel on-costs, salary indexation, and inflation for multi-year projects. Any in-kind or cash commitments must be included in the UQ Costing and Pricing Tool. The tool also allows market rates to be entered directly.

Custodians
Deputy Vice-Chancellor (Research) Professor Bronwyn Harch