[labnetwork] Question about the legality of caps

[Noah Clay]

Hi Milan,

Federal Circular A-21, I believe, is the de facto document for such matters.  Visit this link and search for “Applicable Credits”, pages 12-13, sections 5a and 5b

https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/circulars/A21/a21_2004.pdf

My takeaway is that caps (“discounts, rebates, allowances”) are allowable.  The NIH guideline snippet in your original email points to handling cap abuse (“a heavy user”) and may apply more specifically to an NIH core.  As written, it requires definition of a cap abuse threshold and an internal recharge mechanism.  I like the intent/spirit of this.

Lastly, as far as I know, all federal funding granted to an educational institution must be charged uniformly.  So, an NIH grant can’t be charged differently than an NSF grant.

Good luck,
Noah Clay

University of Pennsylvania 
Philadelphia, PA

Sent from my iPhone

> On Sep 27, 2019, at 15:34, Begliarbekov, Milan <mbegliarbekov at gc.cuny.edu> wrote:
> 
> Dear All,
>  
> At CUNY some of our administration is questioning the legality of capping user fees. After pointing out that this is a ubiquitous practice for all nanofabs, the administration informed us of the following NIH guideline, in particular this paragraph:
>  
> g. Can fee schedules cap the amount charged to a user in a particular time period?
> 
> Generally, no. Fee schedules that cap charges at a certain dollar amount per month if more than a certain number of hours or units are used are not consistent with applicable cost principles unless the institution or some other non-Federal funding supports the difference between the allocable cost and the amount charged to a heavy user. If appropriate for a particular facility, it may be possible to create fee schedules that have different charges depending on timing and level of usage as long as the charges are determined and consistently applied in accord with applicable Federal cost principles.
> 
>  
> In principle none of our users are NIH funded, but I’m wondering if you ever heard of such a guideline, and if so, how does it impact your operations.
>  
> Thank you as always,
>  
> Milan
>  
>  
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