SPACE POLICY Approved: June, 1997

I.     Objectives

II.    Summary of Policy

III.   Research Space Committee

IV.  Incentives/Disincentives

V.   Indirect Cost Recovery

I.  Objectives

The objectives of this policy are:

-     to provide fair and objective standards for departmental space allocation and indirect cost recovery

-     to provide a mechanism through which the Medical Center can optimize its “Research Investment” (including space utilization) and control net expenditures

-     to retain flexibility for the departments to manage their allocated space in an effective and efficient manner and to provide incentives to those departments who manage space well and disincentives to those who do not meet their target cost recovery goals

-     to encourage principal investigators to better manage their space utilization and indirect cost recovery by providing concrete incentives

II.  Summary of Policy

Research space will be allocated largely based upon the total amount of indirect costs recovered by each department annually, relative to the amount of space utilized by that department. Other considerations, such as the nature and space needs of the types of research being conducted in each department, will be considered by the Research Council Strategy Committee in determining the space allocation for each department.  (Laboratory space allocated to a department will then be managed by the department chief.)  The Research Strategy Committee (described below) will establish a per square foot indirect cost recovery target for both campuses (the “Target”).  (This Target may be adjusted by the Research Strategy Committee after implementation by the Medical Center of the schedule for reducing net research expenditure.)  The Target will be phased in over several years based on assumptions that appear to be currently valid.  The Target will be subject to revision depending on actual experience including the future financial status of the Medical Center. (To establish a baseline, a departmental analysis will be developed comparing the current indirect cost recoveries versus the current total indirect costs based on an updated space inventory of both campuses taking into account the waived, downward negotiated or unrecovered portion of the Indirect Cost recovery.)

III.  Research Strategy Committee

To administer and implement this policy, the Medical Center will establish a Research Strategy Committee which will be a subcommittee of the Research Council.  Its membership will consist of both principal investigators and service chiefs from BIDMC, will be broadly representative of the full portfolio of research at the Medical Center (i.e., clinical and basic research, “wet bench” and “office intensive”  research), and will be elected by the Research Council.  The duties of the Research Strategy Committee, which will meet annually, will include reallocating space and distributing the Research Reinvestment Fund (described below) in consultation with the Vice President, Science and Technology.

Between annual meetings the Committee will utilize e-mail to vote on matters requiring immediate attention.  Additional meetings of the Committee may be called by the Vice President, Science and Technology on an as needed basis. All underutilized space will be returned to a pool to be redistributed (per the incentive provision described below) by the Committee.  The Committee will vote on this through e-mail.

Although space allocation will be driven primarily by financial considerations, other criteria will be considered.  For example, research of mostly epidemiological nature might have different needs compared with wet bench research.

IV.  Incentives/Disincentives

            A.   Principal Investigator Incentive 

            The Medical Center will establish each year an annual Research Reinvestment Fund (RRF) in an amount proportional to the increase in net indirect recovery over the prior year or to that by which the Target is exceeded.  The RRF will be administered by the Vice President, Science and Technology with oversight by the Research Strategy Committee.  The RRF will be used to provide monetary incentives to principal investigators who exceed the indirect cost recovery Target.

            (1) Awards made to the principal investigators may be used for:

(a)    purchase of research equipment (including computer hardware and software) not available from other sources.  Note: All equipment purchased with such funds shall be owned by Medical Center;  or

(b)    supplies, and/or travel;  or

                        (c)    other direct research support.

            (2)  Only principal investigators exceeding the established indirect cost recovery Target will be eligible for “grants” from the RRF.  RRF awards will be credited directly to principal investigators who exceed the Target.  Each year the department chief will be furnished with a list of those principal investigators exceeding their target and the amount of credit due to them. The specific uses of the RRF “grants” by each investigator are subject to review and approval by the appropriate chief to ensure that existing internal funding arrangements between the department and principal investigator are addressed, and the expenditure of these funds are consistent with the department’s overall priorities.  In no case will the RRF funds credited to a specific principal investigator be transferable to any other principal investigator(s).

            (3)  Each principal investigator’s share of the overall Medical Center RRF will be calculated annually based on the total indirect cost dollars that the principal investigator exceeded the Target in the prior fiscal year.

            (4)  Principal investigators with grants in deficit position will not be eligible to receive RRF awards unless the deficits are resolved within 3 months from the time that the principal investigator would have been eligible for an RRF award but for the deficits.

            B.  Department Incentives/Disincentives

            (1)  Incentives

            (a)  Additional Space - 

Departments exceeding the Target will have an opportunity for additional space allocation, if justified and if available for redistribution by the space committee.

(b)  Virtual Bank

In order to provide support for unexpected but temporary downturns in research volume, a virtual bank will be established for each department consisting of credits for exceeding IDC Targets in past three years and under those circumstances where the department has chosen not to apply for additional space (or when none was available for redistribution).  The credit will be computed by multiplying the dollar amount the Target is exceeded by the number of square feet assigned to the department.  The cumulative amount in the virtual bank will be limited to 100% of the two most recent year’s credit plus 50% of the credit earned the prior year (i.e., three years back).  The credit may be utilized in lieu of relinquishing and/or paying for underutilized space when a department experiences a temporary decrease in grant volume.  Thus, in addition to using the credits accumulated in the Virtual Bank to acquire additional space (see “(a)” above), the credits may be used to offset Target underages (see attached examples--Attachment 2).  This procedure will result in giving a department with good prior experience a moratorium to recover its former status before having to pay for and/or relinquish space.

(2)  Disincentive

Departments that do not meet the established Target will be required to relinquish and/or pay for underutilized space*.  Payment may be either in the form of cash and/or accrued Virtual Bank credits from previous years. *No department’s space will be reduced to less than 500 square feet.

V.  Indirect Cost Recovery

Indirect Costs actually recovered from the following sources may be included:

A.  Federal Grants.

B.  Foundations and Other Non-profit Organizations That Fund Research at the Medical Center.

C.  Corporate Sponsorship/Funding:  Expected IDC is the going NIH rate

D.  Clinical Sponsorship/Funding:  Expected IDC is 25%

In all sponsored research agreements or instances in which a corporate entity provides research funding, the Medical Center shall endeavor to recover indirect cost at a level as close as possible to the negotiated Federal rate.  A General and Administrative charge will also be added to the direct expenses on all industry sponsored research.  For Medical Center purposes, the funds generated by General and Administrative charges may be treated as indirect cost recoveries and, as such, may be credited to a department’s or individual principal investigator’s indirect cost recoveries for purposes of target measurements and/or incentive computations.¹   Also, part of these funds could be used to support the “research pool” (to be reviewed independently).

E.  Overhead Charges on Research Gifts²

For individual and foundation donations and corporate gifts, no overhead will be charged on amounts less than $25,000.00.  On individual and foundation donations a 15% IDC will apply to amounts over $25,000.00.  On corporate gifts an IDC rate of 30% will apply to amounts over $25,000.00³ Exceptions to this policy will be granted by the Vice President, Science and Technology.

Any funds with conditions attached, e.g., progress reports, etc., are not considered gifts and, therefore, are subject to the full overhead policy.

F.  Royalty/Licensing Fees for New License Agreements:  The Medical Center’s present technology transfer policy requires that royalties obtained from licensing Medical Center technology be distributed as follows:

• 30% Principal Investigator

• 20% Principal Investigator’s Lab or program - (Assuming the principal investigator is currently active at the Medical Center in research.  If principal investigator leaves the Medical Center, then these fees are returned to the Medical Center.)

• 20% Department

• 20% President’s Endowment Fund (Earnings to be allocated by the Research Council)

• 10% Research Investment Reduction

Any subsequent change in the technology transfer policy that affects the above distribution will supersede this distribution.

¹ Some industrial companies with limits on what they will approve for indirect cost rates are willing to pay an additional General and Administrative charge as part of their direct costs budget.

^2. Miscellaneous revenues other than gifts from external sources that will be used for research purposes will be subject to overhead charges.  The IDC rate on such funds will be negotiated on a case-by-case basis.  Examples of externally generated miscellaneous revenues include unrestricted funds accompanying investigators transferring to BIDMC from other institutions, net income from sponsoring seminars and lectures, fees for teaching classes, etc.

³ On endowments, IDC rates of 15% and 30% for noncommercial and commercial donors, respectively, will be charged at time of interest expenditure.