From: Barbara West
Sent: Wednesday, March 19, 2008 1:24 PM
To: 'bwest@navref.org'
Subject: NAVREF - DOD Awards - Timeline, Salary Issues, and IDC
Importance: High

TO:  NAVREF Members

FROM:  Barbara West, Executive Director

This morning there was another conference call among CDMRP/DoD/USAMRAA and NAVREF representatives.  DoD personnel have reviewed the following summary and affirmed that it accurately reflects their positions.  Please make note of the following: 

1.       Timeline.  CDMRP requires outstanding documentation regarding IDC rates, budgets, personnel, etc., to be submitted by the end of this week.  Next week it will review the status of the projects that were recommended for awards and will start making decisions about alternates shortly thereafter. 

2.       Salaries for VA Employees.  As published in September 2007, CDMRP policy in regard to use of DoD funds to pay salaries and fringes of VA employees states:

Under grants to the VANPCs, in accordance with the established policies and salary structure of the VANPC, if the PI is a part-time VA employee, DoD funds may be used to pay the differential between the individual's VA part-time salary and the salary level for a full-time VANPC commitment in proportion to the level of effort devoted to the project.

Therefore, if the PI has a part-time appointment with the VANPC, an appropriate portion of the individual's salary that would otherwise be supported by the non-profit VANPC may be charged to the DoD grant.

No salary or fringe benefit payments may be made from DoD funds to support career, career-conditional, or other Federal employees (civilian or uniformed services) with permanent appointments provided for under existing position ceilings of a given Federal component.  While the level of effort required for the research project must be allowed by the employing agency as part of the individuals' official duties, salary costs associated with an individual participating in an official capacity as a Federal employee are not allowable costs under a DoD grant.

While the third paragraph might lead one to believe that salary support may be paid to VA to reimburse for term (or non-career) employees, DoD subsequently has made it clear that DoD funds may not be used to support any VA salaries regardless of whether the VA employee is a permanent or term, full-time or part-time VA employee.  Separately, the DoD office of General Counsel has affirmed that it would be a violation of DoD appropriations law pertaining to supplementation of appropriations for DoD funds to be used to reimburse VA for salaries of VA employees, including term employees such as PhD investigators on “soft” money. 

As provided in the DoD policy, an NPC can hire a part-time VA employee as a part-time NPC employee and use DoD grant funds to pay the salary of a part-time NPC position provided that the total number of VA and NPC hours do not exceed a full-time position, based on a 40-hour work week.  It is our understanding that some full-time VA PIs on term appointments are reducing their VA eighths and becoming part-time NPC employees to accommodate the DoD policy. 

Additionally, DoD will allow salary and fringes to be transferred to affiliated universities for dually appointed VA/university personnel under joint personnel agreements (JPAs) provided that – again - the total VA/university commitment does not exceed a full-time position based on a 40-hour work week.  See discussion below for details.  NPCs hiring part-time VA employees and NPCs with JPA agreements with universities must submit to DoD a copy of their MOU detailing the employees’ respective VA, NPC and/or university commitments.

3.       Forty-Hour Work Week.   NPCs should note that the DoD salary policy makes no mention of the 60-hour work week that is allowed under NIH policy when a university is a joint employer with the VA and pays salary for academic effort on an NIH grant.  DoD subsequently has clarified that DoD does not acknowledge the 60-hour work week and that all salary calculations must be made on the basis of a 40-hour work week.  DoD does not allow a full-time VA employee to obtain - from an NPC or a university - additional compensation over and above a full-time federal salary for effort on a DoD-funded grant.  As noted above, MOUs establishing employees’ respective VA, NPC and university commitments must be based on a 40-hour work week.

NAVREF recognizes that the NIH 60-hour work week is ingrained in VA culture and when preparing their budgets for DoD awards, some NPCs may have assumed that DoD would accept the NIH policy.  They are now learning from DoD contract specialists and grants managers that this is not the case and are having to re-evaluate the budgets and PI effort.

4.       Indirect Cost Rates.  During the call this morning, DoD staff indicated that for NPCs that do not already have a negotiated federal indirect cost rate, it is likely that the provisional rate approved by DoD will serve as the NPC’s maximum rate for the duration of the PTSD/TBI awards.  DoD plans to cap IDC rates at the provisional rate even if an NPC subsequently negotiates a higher final rate.  This is because the PTSD/TBI funds are a one-time appropriation that must all be obligated by the end of the current fiscal year so there will be no funds available to pay a later - and possibly higher - negotiated rate.  This reinforces the importance of engaging expert assistance in preparing proposals for provisional rates as discussed in the email sent yesterday (see below).

At this time, it is uncertain what process NPCs should use to negotiate final IDC rates.  CDMRP does not have an arrangement with the Office of Naval Research (ONR) to negotiate final IDC rates for institutions that receive their first federal awards from CDMRP.  This is being discussed at this writing, but is not yet worked out.  DHHS will negotiate rates for nonprofits that receive their first awards from other agencies, but NAVREF is uncertain of the process and will be looking into that.  Please watch for an update in a future email.

Barbara F. West

Executive Director

National Association of Veterans' Research and

   Education Foundations (NAVREF)

5480 Wisconsin Avenue, Suite 214

Chevy Chase, MD 20815

T: 301-656-5005

F: 301-656-5008

Email: bwest@navref.org

Web Site: www.navref.org

________________________________________________________________________

From: Barbara West
Sent: Tuesday, March 18, 2008 12:46 PM
To: 'bwest@navref.org'
Subject: NAVREF - Update on IDC for DOD Awards

TO:  NAVREF Members

FROM:  Barbara West, Executive Director

There have been several conference calls among CDMRP/DoD/USAMRAA and NAVREF representatives in an ongoing effort to ensure smooth handling of the DoD PTSD/TBI awards.  As those of you who are receiving these awards are aware, DoD has its own policies and procedures and these are often different from those of other granting agencies.   Please make note of the following:

1.       Indirect Cost Rates:  NPCs that do not already have federally negotiated indirect cost rates should provide USAMRAA Contract Specialists (who work with CDMRP Grants Managers) with a sound basis for their proposed rate.  This should be a rate developed using actual and anticipated costs, not IRS Form 990.  A rate calculated on the basis of the expenses reported in Part II of the NPC’s last completed IRS Form 990 is likely to be low and may result in the NPC not recovering all of its allowable costs.  Additionally, a survey of other NPC rates or the administrative overhead rate charged on private sector funds is not an appropriate basis for a federal rate. 

USAMRAA Contract Specialists and CDMRP Grants Managers are being advised to accept proposals for provisional rates on the basis of OMB Circular A-122.  It is our understanding that in the past some may have been accepting only 990s and declining to accept proposals.  If that is the case for your NPC, we very strongly recommend your working with an experienced consultant to develop a proposal for a provisional rate and re-submitting a proposal using real costs rather than the 990 as the basis for the NPC’s rate.  Needless to say, time is of the essence.

As noted previously, Dave Vedder (dpvedder@comcast.net) is available for hire to assist NPCs in preparing proposals for provisional rates.  Also, Robert (Bob) Forrester (rforr1@comcast.net) has been highly recommended by some of your NAVREF colleagues and welcomes the opportunity to work with NPCs.  Acceptance of a low indirect cost rate could cause an NPC a severe cash flow problem as it administers the grants; please engage expert assistance on this very important aspect of administering federal awards. 

2.       NPC Audits.  CDMRP contract specialists may ask NPCs for a copy of their most recent financial audit.  The purpose is to verify that the NPC has undergone the appropriate type of audit (GAAS, GAGAS or OMB Circular A-133) and that there were no significant adverse findings.  We are in agreement with CDMRP that the numbers in the audit will not be used as the basis for a provisional indirect cost rate. 

Barbara F. West

Executive Director

National Association of Veterans' Research and

   Education Foundations (NAVREF)

5480 Wisconsin Avenue, Suite 214

Chevy Chase, MD 20815

T: 301-656-5005

F: 301-656-5008

Email: bwest@navref.org

Web Site: www.navref.org