Southern Administrative Heads
Commodity Group IDC Conference Call Notes
July 7, 2016

Greg Bohach (chair), Mark Hussey, Mark Cochran, Nancy Cox, Rodgers Leonard, Paul Patterson, Tom Coon, Jack Payne, Chris Ray, Joe Culin, Kelly Gerry, Gary Lemme, Bob Shulstad, and Eric Young

  1. Purpose for call - Greg Bohach, S-AHS Chair (Greg joined the call late, purpose was done by Eric)
    1. The Deferred Maintenance Strategy Committee met in DC on May 25.  Five of our Administrative Heads are on this committee and were in attendance; Tom Coon (chair), Mark Hussey, Greg Bohach, Jack Payne, and Alan Grant, along with Eric Young as a support ED.
    2. Among other strategies, there was a great deal of discussion about the need to recover more indirect costs; preferably full indirect from all federal agencies and potentially some indirect from commodity groups and other non-federal grants. 
    3. Jack related his experiences over the past 2 years working to establish indirect cost recovery from commodity group grants for UFL/IFAS, just to recover what is required by his central administration.
    4. One the main points that came out in the discussion is how difficult it is for a single institution to establish new indirect cost requirements with a commodity group. 
    5. Therefore, Jack, Mark, Alan, and Greg have asked Eric to set up a conference call with the southern 1862 AHS to discuss the idea of a united effort to establish commodity group indirect cost rates.  They thought it was worth discussing the idea to see if the AHS were generally supportive or not.

  2. Perspective of Deferred Maintenance Committee on IDC - Tom Coon, Chair
    (See draft Deferred Maintenance Committee report)
    1. The committee is recommending a two-pronged approach
      1. Establishing a federal funding source for major renovation and replacement construction
      2. Recovery of full IDC from all federal sources and partial IDC from other sources whenever possible.

  3. UFL/IFAS experiences implementing commodity grant IDC's - Jack Payne
    (See Jack’s letter to Citrus Packers and his call notes)
    1. Reductions in federal and state funding of LGU’s for the public good has been significant
    2. UFL just built a $60 M medical building with no public funds, this is going to be more common
    3. A no new taxes attitude is prevalent among most state legislatures so that funding source is unlikely to increase much
    4. I’ve been working on implementing commodity grant IDC for 3 years and it’s been very difficult to convince the leadership that it’s an appropriate charge
    5. There is more power in a collective approach to a change like this, but each institution’s situation is unique so it may not be appropriate for everyone
    6. FL is a specialty crops state so there are a large number of commodity groups.
    7. Out of $128 M in grant funding, $39 M came from commodity groups with no IDC recovered
    8. UFL VP for research requires every unit to pay 12% IDC whether it’s collected or not. 
    9. $4.7 M was paid to UFL by IFAS
    10. Commodity groups generally don’t understand how research is funded overall and that the real indirect cost is around 50%
    11. A key step was when they began to understand how IDC is used for real costs to support research on their problems and that remaining funds were used by IFAS for facilities, repair & renovation, start-ups, etc.
    12. Some groups have agreed to pay 12% IDC; forestry, strawberry growers, cattlemen, citrus growers have requested a 3-year phase in period.
    13. Farm Bureau still opposes the IDC, but UFL President and I are meeting with them soon to discuss it further and the President is supportive.
    14. Peanut growers have refused to pay IDC, so IFAS will not accept any research grant funding from them
    15. FL Agricultural Commissioner has agreed to pay IFAS 8% IDC on block grant funding for work IFAS does.  8% is maximum allowed by USDA on these funds.
    16. Effective July 1, all commodity grants are now charged 12% IDC

  4. Other experiences with commodity grant IDC – all
    1. MS State does not charge any IDC that the college does not recover
    2. If they were to try implementing an IDC charge, the Farm Bureau and Delta Council are the key groups that would have to agree
    3. A lot of the concern over paying IDC is due to misunderstanding of how research is actually funded
    4. In AL, CES groups have focused on getting more state appropriations and therefore will continue to waive IDC
    5. UGA is funded from the state for $5 M per year for four years to use for repair & renovations and equipment purchases
    6. UGA has been instructed by two consecutive governors specifically not to request IDC from commodity groups
    7. All IDC collected by Texas A&M AgriLife stays within the agency, but a percent of that goes to support the internal grants & contracts office
    8. Univ of AR has negotiated an agreement with USB that does not prohibit IDC or restrict licensing and royalties
    9. OK State is working to increase commodity funding to a more significant level and therefore does not want to approach the IDC question until that’s achieved

  5. Discussion on moving forward with regional effort to implement IDC for commodity grants - all
    1. Because each institution’s situation is different, particularly related to commodity group funding, it does not seem appropriate to try to initiate a coordinated regional effort to implement commodity grant IDC recovery at this time.
    2. However, no matter what the state situation is, everyone should try to educate their commodity group leaders further on how research is funded and the real costs of carrying out a commodity grant’s objectives.

  6. Next steps – all
    1. Eric will work with Jack to develop talking points to use with commodity group leaders on the real costs of conducting research and how IDC is used in the university and college/unit.
    2. Another S-AHS conference call will be scheduled in August to follow up on this discussion and conduct any other regional business since there will not be a Southern CARET/AHS meeting this summer.