In addition to the direct costs of research, each project also incurs facilities & administrative (F&A) costs, such as utilities, space, and central administration labor. (Read more about how these costs are calculated.) The costs being reimbursed through the F&A rate are real costs. This rate is not speculative, but rather established each year after audit by the federal government of actual costs incurred. The underlying costs still exist and must be covered for each project.
Under-recovery of F&A costs occurs when a sponsor does not fully reimburse MIT at its negotiated F&A rate. In these cases, other funding sources must be used to cover F&A costs. MIT does not waive or reduce the F&A costs of any sponsored research project.
Under-recovery may result when:
- The sponsor will not pay the Institute's full F&A rate.
- The sponsor uses a different indirect cost base, such as Total Direct Cost (TDC).
- The sponsor uses a different rate than the current Institute rates, such as a fixed-for-the-life award.
Funding Under-recovery
Sponsored research projects with under-recovery are reviewed by the DLCIs and funded using a combination of the central allocation and local resources. The central allocation is intended for faculty, but deans may make local exceptions for requests for non-faculty.
Before submitting a proposal, PIs should work with their DLCI admin to request under-recovery funding. The department head will review the request, and, once approved, the DLCI will monitor under-recovery spending during the project period.
Funding or approval may differ depending on the sponsor, and DLCI administrators should review sponsor-specific guidance.
Updated November 17, 2025