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Strategies That Influence Cost Containment in Animal Research Facilities (2000)

Chapter: Appendix A: Office of Grants and Acquisition Management Memorandum

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Suggested Citation:"Appendix A: Office of Grants and Acquisition Management Memorandum." National Research Council. 2000. Strategies That Influence Cost Containment in Animal Research Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10006.
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APPENDIX A
Office of Grants and Acquisition Management Memorandum

Office of Grants and Acquisition Management memorandum concerning the treatment of the facilities and administrative costs of animal research facilities in OMB Circulars A-21, A-122 and Appendix E, 45 CFR Part 74:

OGAM Action Transmittal

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Office of Grants and Acquisition Management (OGAM)

Office of the Assistant Secretary for Management and Budget

Room 517D – Hubert H. Humphrey Building

200 Independence Ave. S.W.

Washington, D.C. 20201

ACTION TRANSMITTAL – EXTERNAL

Transmittal No.: OGAM AT 2000–1

Date: November 15, 1999

TO: Federal Grantees and Awarding Agencies

SUBJECT: Changes in the Treatment of Research Costs Related to Animal Facilities

Suggested Citation:"Appendix A: Office of Grants and Acquisition Management Memorandum." National Research Council. 2000. Strategies That Influence Cost Containment in Animal Research Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10006.
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REGULATION: OMB Circulars A–21, A–122 and Appendix E, 45 CFR Part 74

APPLICABILITY: Federal Grantees and Awarding Agencies

EFFECTIVE DATE: Upon Issuance for All Newly Submitted Proposals for Facilities and Administrative Cost Rates

PURPOSE AND BACKGROUND: Office of Management and Budget Circulars and HHS regulations provide guidance on the treatment of specialized service facilities, including animal facilities, if material in amount. The animal care facilities of research institutions are required by OMB and Departmental regulations to be charged directly to Federal grants on a fee-for-service basis. This fee normally consists of both the direct costs and the allocable share of indirect costs (also known as Facilities and Administrative [F&A] costs) of the service. The purpose of this OGAM Action Transmittal is to clarify what facilities costs are to be considered part of the fee (and charged directly) and what portion should be treated and charged as an F&A cost. This clarification is required because, in recent years, the sophistication of animal research has caused more of this animal research to be conducted within the confines of these facilities. Since most nonanimal research takes place in office or laboratory space (which is included as part of the F&A cost), an inequity exists.

ACTION: Based on the changing nature of research conducted in these facilities, we are changing our methodology to include a certain portion of animal facility costs in the institution's F&A rates. This includes procedure rooms, operating and recovery rooms, isolation rooms, and quarantine rooms directly related to research protocols, as well as rooms that house animals involved in research that are not generally removed from the facility for conducting research. Notwithstanding this policy change, institutions must continue to document (through a space survey) the particular research projects conducted in research space included in an F&A pool.

In addition, to avoid potential over-allocations of F&A costs, on a case-by-case basis animal care charges may be treated like patient care costs and excluded from the allocation base used to charge F&A costs to awards.

To summarize, this Action Transmittal establishes a methodology for grantee organizations to account properly for costs of animal facilities.

AUTHORIZING OFFICIAL: Terrence J. Tychan Deputy Assistant Secretary for Grants and Acquisition Management

Suggested Citation:"Appendix A: Office of Grants and Acquisition Management Memorandum." National Research Council. 2000. Strategies That Influence Cost Containment in Animal Research Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10006.
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Page 63
Suggested Citation:"Appendix A: Office of Grants and Acquisition Management Memorandum." National Research Council. 2000. Strategies That Influence Cost Containment in Animal Research Facilities. Washington, DC: The National Academies Press. doi: 10.17226/10006.
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Page 64
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Care and use of animals in research are expensive, prompting efforts to contain or reduce costs. Components of those costs are personnel, regulatory compliance, veterinary medical care, and laboratory animal management, equipment, and procedures. Many efforts have been made to control and reduce personnel costs, the largest contributing factor to cost, through better facility and equipment design, more efficient use of personnel, and automation of many routine operations. However, there has been no comprehensive, recent analysis of the various cost components or examination of the strategies that have been proven or are purported to decrease the cost of animal facility operation.

Strategies that Influence Cost Containment in Animal Research Facilities examines the current interpretation of governmental policy (Office of Management and Budget Circular A-21) concerning institutional reimbursement for overhead costs of an animal research facility and describes methods for economically operating an animal research facility. This report develops recommendations by which federal auditors and research institutions can establish what cost components of research animal facilities should be charged to institutions' indirect cost pool and what animal research facility cost components should be included in the per diem charges to investigators, and assesses the financial and scientific ramifications that these criteria would have among federally funded institutions. Further, the report determines the cost components of laboratory animal care and use in biomedical research and assesses and recommends methods of cost containment for institutions maintaining animals for biomedical research.

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