[secabeen]

> A $8M grant doesn’t cost a university any more than a $1M grant for university admin in terms of “indirect costs”. The fact that they think they’re entitled to several million of it to waste on things that shouldn’t be coming from taxpayer funded NIH grant money is obscene.

Sure it does. An 8M grant is going to have roughly 8X more researchers working under it than a 1M grant. Each of those researchers needs space, parking, IT support, HR supports, etc. There are some economies of scale, but the idea that you could increase the staffing of a business by 8x and not have to hire more HR and accounting people is silly.

[robwwilliams]

Yes, I agree the overhead scales close to linear unless a grant is very heavily dependent on one type of cost such as bulk sequencing of 10,000 subjects. In that case the overhead is usually much lower or disallowed. And there is no overhead allowed on equipment.

[syndicatedjelly]

This is such a wasteful way to think...do economies of scale not apply to universities at all? They're allowed to just bill as if there is 0 savings to be found in bulk construction and administration?

[secabeen]

Generally, no, they don't bill at 0 savings. The rate is set on a per-institution basis. The rate setting process incorporates the documented economics of scale that that institution is achieving already. This is why schools have different rates; the more resources (instruments, facility use, computational, etc.) the university provides at no/low-cost to the researchers, the higher the rate.

If the rate wasn't set in this way, the overhead would be well above 100%, as it is in most labor-heavy businesses like consulting and law.