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DOD Limit on F&A Costs
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The Department of Defense (DOD) has announced new restrictions on the maximum amount of Financial and Administrative costs that can be recovered from its awards, capping indirect costs at 35% of the total award. This should not affect us, given our current F&A rate.
For example, if we propose $100,000.00 of direct costs and there are no exclusions and we add indirect costs of 51.5% we get $151,500.00 total costs. Therefore the indirect costs are $51,500.00. To prove that we have not exceeded the limit of 35% we divide the indirect costs by the total costs, as follows:
$51,500.00/ $151,500.00 = 34%
For more information, please read this document.
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