[jltsiren]

There are different definitions of direct and indirect costs. According to the strictest definition, only billable hours are direct costs. All other costs of employment are indirect. But at least for applications from the academia, NIH considers indirect costs of employment direct costs.

Grants are not money you can use the way you see fit. If the budget includes funds for hiring employees, you cannot use them to hire contractors. You can use the money as originally requested, return it, or apply for a permission to change the budget. You can make minor changes on your own, but not major changes such as hiring a third party to do a substantial part of the work.