Uniform Guidance 200.460 Proposal Costs
Proposal costs are the costs of preparing bids or proposals on potential federally and non federally funded sponsored agreements or projects, including the development of data necessary to support the institution’s bids or proposals. Proposal costs of the current accounting period of both successful and unsuccessful bids and proposals normally should be treated as F&A costs and allocated currently to all activities of the non-Federal entity. No proposal costs of past accounting periods will be allocable to the current period.
Proposal cost cannot be assessed to federal grants. A research grant is awarded to support specific research and to help attain an outcome or goal (as stated in the project scope of work) in which the funds were awarded for. Proposals are not research, they are not a guarantee of funding and changes may be negotiated.
Proposal costs such as writing, reviewing, copying, and mailing submissions cannot not be assessed to a sponsored project. Travel for collaboration meetings to discuss future projects are considered proposal costs. Effort generated by proposal work needs to be reported as non-sponsored effort; salary needs to be charged to non-sponsored funding. Ask this question: How can effort be reported on a project that doesn’t exist? It can’t. Understandably, current projects stem new ideas and thus new proposals. The key word is “new”. Effort for proposal work cannot be reported on an existing like project. The awarded project is for existing research, not proposed research.
Per Uniform Guidance, proposal costs should be treated as an indirect cost (overhead, F&A). It is an operating cost for our institution. Research is one of the missions of UW Madison. All cost associated during the proposal stage should be charged to unrestricted funding. It is up to the Department/Center to determine if such costs should be the responsibility of the PI’s or the Department/Center.
If a proposal is successful and is awarded, no past proposal cost can then transferred to the new project. Even though the costs were associated with the award, they are not deemed direct expenses. They did not help meet the aim or goals defined in the scope of work.
Resources and Helpful Links
- Uniform Guidance (UG) 200.420 https://www.ecfr.gov/cgi-bin/text-idx?SID=ee873e1aa906cf3b0d7474d25be3b5a9&node=2:188.8.131.52.1&rgn=div5#se2.1.200_1460
- RSPs Allowable Direct Costs on Sponsored Projects https://www.rsp.wisc.edu/awardmgt/directcosts.cfm
- See page 93 in the NCURA blue-colored guide