Costing and Pricing workshop - SPRING 2011

Costing and Pricing workshop - SPRING 2011 Costing and Pricing workshop - SPRING 2011 - Start

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1. Costing and Pricing Workshop. Organised by Finance and GRE for University of Greenwich staff. Costing and Pricing workshop - SPRING 2011. 2. Research Team, Greenwich Research & Enterprise. Our aim is to..... ID: 250134 Download Presentation

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Costing and Pricing workshop - SPRING 2011




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Presentations text content in Costing and Pricing workshop - SPRING 2011

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Costing and Pricing workshop - SPRING 2011

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Costing and Pricing Workshop

Organised by Finance and GRE for University of Greenwich staff

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Costing and Pricing workshop - SPRING 2011

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Research Team, Greenwich Research & EnterpriseOur aim is to....‘assist with the delivery of an efficient, pro-active and customer-focused pre-award service’FinanceOur aim is to.... ‘assist with the delivery of an efficient, pro-active and customer-focused post-award service’

UoG Central Services

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Contact Details

Research Support Team

Wendy CurranResearch Finance ManagerExtn: 8283 w.curran@gre.ac.ukCaroline EdneyResearch & Consultancy Administrator Extn: 7626 c.j.edney@gre.ac.ukJane AdamsonResearch & Consultancy Administrator Extn: 9858 j.adamson@gre.ac.uk

Finance, Research & Enterprise

Tracy Banton Research Support Manager Extn: 8406 T.Banton@gre.ac.uk     Melanie HackettFunding Administrator & Adviser   Extn: 7920m.hackett@gre.ac.uk

Costing and Pricing workshop - SPRING 2011

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Full Economic Cost

(FEC) :

Costing Bids Guidance

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Background

Transparent Approach to Costing (TRAC), which HEFCE created in 1999.

The process went further creating Full Economic Costing (FEC) for all UK universities in Sept 2005, with first Research Council FEC grants awarded April 2006.

Academic time allocation schedules are used for TRAC and also to calculate the amounts for Estates and Indirect Costs.

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All projects are to be costed at FEC

This enables Schools to make an informed decision.

Loss-making projects can be taken on: foot in the door, new markets, charities.

It is the portfolio of total institution projects that is important.

The HEFCE requirement is that HEIs are sustainable.

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FEC Template

Directly Incurred (DI):

Costs that are explicitly identifiable as arising from the conduct of a project

1 Person for a year

Piece of kit

Travel Exps

Directly Allocated (DA):

Costs of resources used by a project that are shared by other activities.

PI one day a week

Space used (Estates Rates)

Indirect Costs

Current FEC indirect cost rate

Overheads

Total

FEC

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Space & Overheads

Estates rates for space includes:

Space, utilities, maintenance, insurance, investment adjustment, depreciation.

Indirect rate includes:

Central costs like HR, Finance, Personnel & your department’s own administration

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Estates & Indirect Rates

1st February 2011 rates are:

Estates rates - Lab based projects - £10,908

fte

pa

- Office based - £7,755

fte

pa

Indirect rates - £33,143

fte

pa

These rates only apply to PIs, Co-Is, RAs when calculating a bid; does not apply to admin support or students.

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Calculating an FTE

4 Examples for a

3

year project:

50% of your time = 0.5fte

2) 1000 hrs during the whole project = 0.2fte

(1000hrs / (

1650

hrs x

3

years))

3) 264 days during the whole project = 0.4fte

(264 days / (

220

days x

3

years))

4) 66 weeks during the whole project = 0.5fte

(66 weeks / (

44

weeks x

3

years))

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Calculating your charge out rate

Find out your salary including on costs (NI, Pension).

You can get this from GRE or your Director of Resources.

Add current Indirect cost rate, and typical estates rate.

The total can be divided by

1650

to give your

hourly

rate.

The total can be divided by

220

to give your

daily

rate.

The total can be divided by

44

to give your

weekly

rate.

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Price is different to Cost

Once FEC is calculated a price can then be decided upon by the applicant in agreement with the School.

Some prices particularly in the public sector are restricted (e.g. 80% of FEC for RCs).

In the commercial sector the School can choose the price – can be above FEC: should price at a premium where we have a market advantage or where the market can stand it. e.g. For accounting, audit, tax & legal services: Senior £2,000 a day ,Specialist ££££££

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Commercial Consultancy Contract (Table 1)

DI: 2 part time people for 2 years(1.25ftes pa) 79,027

Kit 8,000

Travel 2,000

Other

25,000

114,027

DA: PI & Co-I half day a week for 21,240

2 years (0.2ftes pa)

Estates 1.45fte x

£7,755

x 2years

22,490

43,730

Indirect Costs 1.45 x

£33,143

x 2years

96,115

FEC = 253,872

PRICE = ??

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Research Council Contract (Table 2)

DI: 2 part time people for 2 year (1.25ftes pa) 79,027

Kit 8,000

Travel 2,000

Other

25,000

114,027

DA: PI & Co-I half day a week for 21,240

2 years (0.2ftes pa)

Estates 1.45fte x

£7,755

x 2years

22,490

43,730

Indirect Costs 1.45 x

£33,143

x 2years

96,115

FEC = 253,872

PRICE = 80% 203,098

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UoG R&E Portfolio 2010

£MPublic R 7.2Non Public R 4.0Consultancy 4.2 15.4

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Refreshment Break

After the break even sunnnier subjects: FP7VAT Internal Procedures Q&A

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Extra Information

Inflation is relevant for all staff costs and estates and indirect rates

If over a year include a 2% inflation year on year.

For RCs they calculate the inflation for you.

Remember to build in annual pay increments where applicable.

Admin and technical support staff are to be included in a project costing but their

fte

are not to be included in the estates and indirect cost calculations

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Project Costing and Reimbursement Rates for FP7

Budgets should be costed using the same principles of full economic cost (fEC) EC/FP7 indirect cost rates applied accordingly.Claim value will be determined by the type of activity within each work package.Research and Technological DevelopmentTrainingManagementOther.

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REMEMBER

GRE ARE HERE TO HELP YOU WITH ALL THISYOU HAVE A SAFETY NET!

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VAT

Universities are not exempt from being charged VAT. Exceptions are: - Advertising costs - Some medical research costs(Both have to have a signed certificate sent to the supplier).Thus VAT is a further cost to be included in your RESEARCH costs.

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VAT on Overseas Purchases

To ensure goods & services are not bought from abroad to escape paying vat on UK goods & services, Customs decree that we should self charge vat.

Thus the vat guidance applies to goods & services whether bought in UK or Overseas

.

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VAT Guidance

Consultancy

: All routed through GUE Ltd so fully vatable activity and any vat we are charged are recovered from Customs.

Research

: If Publicly funded, we cannot recover the vat from Customs so include any vat on goods/services bought in your costings.

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VAT Examples

BBSRC research grant needs £100k of equipment + vat = £120,000 full cost.(This is publicly funded and so HMRC will not pay the vat element £20k, so will have to include in proposal as irrecoverable vat).Barclays PLC needs £100k of overseas market research + vat self charge = £120,000 cost.(Not publicly funded can reclaim vat so don’t need to include in proposal).

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VAT Pitfalls

Beware when subcontracting others!If another University does research for us, they will not charge vat and vice versa: it will be an exempt supply.BUT if a company works for us they WILL charge vat and if the original contract is publicly funded it CANNOT be claimed from HMRC. Agree a price inc vat.

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Who’s Public?

Publicly Funded Clients are:UK Research CouncilsUK Govt DepartmentsUK Govt AgenciesUK CharitiesOther UK UniversitiesEuropean Commission (Except FP6)Research services to these will be outside the scope of vat or exempt.

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UoG Internal Procedures

Forms 1 & 2: To be filled out so that the University knows what is happening.

Why? 1) Track success & opportunities

2) Ability to share research expertise

3) Minimising wasted time & resources on unrealistic expectations

4) Data for Government returns

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Q & A

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