Presentation Transcript

1. Costing and Pricing Workshop

   Organised by Finance and GRE for University of Greenwich staff Costing and Pricing workshop - SPRING 2011
2. UoG Central Services Research Team, Greenwich Research & Enterprise Our aim is to.... ‘assist with the delivery of an efficient, pro-active and customer-focused pre-award service’ Finance Our aim is to.... ‘assist with the delivery of an efficient, pro-active and customer-focused post-award service’ Costing and Pricing workshop - SPRING 2011
3. Contact Details Research Support Team Finance, Research & Enterprise Tracy Banton Research Support Manager Extn: 8406  T.Banton@gre.ac.uk Melanie Hackett Funding Administrator & Adviser   Extn: 7920 m.hackett@gre.ac.uk Wendy Curran Research Finance Manager Extn: 8283 w.curran@gre.ac.uk Caroline Edney Research & Consultancy Administrator Extn: 7626 c.j.edney@gre.ac.uk Jane Adamson Research & Consultancy Administrator Extn: 9858 j.adamson@gre.ac.uk Costing and Pricing workshop - SPRING 2011

4. Full Economic Cost(FEC) :Costing Bids Guidance

   Costing and Pricing workshop - SPRING 2011
5. 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. Costing and Pricing workshop - SPRING 2011
6. 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. Costing and Pricing workshop - SPRING 2011
7. FEC Template Costing and Pricing workshop - SPRING 2011
8. 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 Costing and Pricing workshop - SPRING 2011
9. 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. Costing and Pricing workshop - SPRING 2011
10. 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 / (1650hrs 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)) Costing and Pricing workshop - SPRING 2011
11. 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 by1650 to give your hourly rate. The total can be divided by220 to give your daily rate. The total can be divided by44 to give your weekly rate. Costing and Pricing workshop - SPRING 2011
12. 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 ££££££ Costing and Pricing workshop - SPRING 2011
13. 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 = ?? Costing and Pricing workshop - SPRING 2011
14. 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 Costing and Pricing workshop - SPRING 2011
15. UoG R&E Portfolio 2010 £M Public R 7.2 Non Public R 4.0 Consultancy 4.2 15.4 Costing and Pricing workshop - SPRING 2011
16. Refreshment Break After the break even sunnnier subjects: FP7 VAT Internal Procedures Q&A Costing and Pricing workshop - SPRING 2011
17. 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 Costing and Pricing workshop - SPRING 2011
18. 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 Development Training Management Other. Costing and Pricing workshop - SPRING 2011
19. REMEMBER GRE ARE HERE TO HELP YOU WITH ALL THIS YOU HAVE A SAFETY NET! Costing and Pricing workshop - SPRING 2011
20. 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. Costing and Pricing workshop - SPRING 2011
21. 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. Costing and Pricing workshop - SPRING 2011
22. 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. Costing and Pricing workshop - SPRING 2011
23. 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). Costing and Pricing workshop - SPRING 2011
24. 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. Costing and Pricing workshop - SPRING 2011
25. Who’s Public? Publicly Funded Clients are: UK Research Councils UK Govt Departments UK Govt Agencies UK Charities Other UK Universities European Commission (Except FP6) Research services to these will be outside the scope of vat or exempt. Costing and Pricing workshop - SPRING 2011
26. 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 Costing and Pricing workshop - SPRING 2011

27. Q & A

    Costing and Pricing workshop - SPRING 2011