Research@UIC > Grant & Contract Proposals > Preparing Budgets >
Calculating TDC & MTDC

Calculating Total Direct Cost (TDC) & Modified Total Direct Cost (MTDC)

Which one do I use to calculate my F&A?

Unless specific program guidelines state otherwise,

• use a MTDC base, if you are receiving full F&A.
• use a TDC base, if you are not receiving full F&A.

Definitions

Total direct costs (TDC) include all costs charged to a sponsored program account, excluding indirect costs.

Modified total direct costs (MTDC) are total direct costs excluding:

1. The portion of each individual subgrant and subcontract in excess of $25,000. Please note that an individual grant or contract may include several subgrants or subcontracts.

 
2. Equipment with an estimated life of one or more years and
   1. An acquisition cost of $500 or more, including components for fabrication of equipment which cost $500 or more, or
   
   
   2. Lease purchase agreements for equipment costing $500 or more.
       
      Read more on the explanation for UIC equipment thresholds.
       
3. Arrangements under which federal financing is in the form of loans, scholarships, fellowships, traineeships or other fixed amounts based on such items as education allowances or published tuition rates and fees of an institution.

 
4. Patient Care Charges

 
5. Tuition remission included as a direct cost

 
6. Rental Costs

 
7. Capital Expenditures

Calculating

When using an F&A rate (indirect cost), the F&A rate is applied to a Modified Total Direct Cost (MTDC) base. The general rule of thumb is that if UIC is able to budget for the full F&A rate on a proposal, the MTDC base should be applied, unless specific sponsor guidelines state otherwise.

An MTDC base consists of salaries and wages, fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of the each subgrant or subcontract (regardless of the period covered by the subgrant or subcontract).

Some sponsor's, primarily those considered not- for- profit, will only reimburse an F & A rate (also referred to as administrative, overhead or indirect costs) that is lower than the federal negotiated rate. In this case, the F&A rate should be applied to a total direct cost (TDC) base. This means that no exclusions will be taken before applying the F&A. However, for- profit sponsor's, are required to pay the full negotiated rate specific to the activity, i.e., research, clinical trial, testing, etc.

Always review the programs guidelines as many sponsors indicate what costs, including F&A is and is not allowable. When applying less that the full F&A rate, a copy of the sponsor's guidelines should be included with the proposal when submitted to ORS.