Animal Welfare Information Center Bulletin, Summer 2000, Vol. 11 No. 1-2

Cost Analysis and Rate Setting Manual for Animal Research Facilities May 2000

The first edition of the Cost Analysis and Rate Setting Manual for Animal Research Facilities was published in 1974. Revisions in cost principles for Federal grants and contracts led to another revision in 1979. Then, further evolution of the animal research environment led the National Center for Research Resources (NCRR) at the National Institutes of Health (NIH) to appoint an expert committee to revise the 1979 manual.

This 2000 revision was prompted by:

The overall goals of this revised manual are to:

These goals relate to the cost of animal research. To address these goals, the committee had to address and resolve a number of problems or issues, such as a lack of consistency, appropriate allocation of costs, and definition of differences between actual costs and the institution’s charges to sponsored projects. A careful review of animal research costs highlighted substantial inconsistencies. The committee found major inconsistencies in what was included in animal research facilities’ billing rates for services. In some institutions, all animal research facility costs are included in the direct billing rates, whereas in others, significant costs are in the institutional facilities and administrative (F&A) (indirect) cost rate, and in still others, substantial amounts are being borne (subsidized) by the institution. There were inconsistencies in differentiating between animal research facility support and institutional F&A costs. The committee concluded that institutions were attempting in good faith to comply with general guidelines, but the end results were unsatisfactory.

The committee believes that a better distinction between direct and institutional F&A costs will provide greater flexibility in supporting high-quality, productive research. In evaluating the distinctions between direct and F&A costs, the committee considered the following:

In recognition of these considerations, the Cost Manual Revision Committee has provided a methodology whereby certain F&A costs associated with animal research within an animal research facility are included in the institution’s F&A rate, the same as for any other research laboratory. As discussed in chapter 2, the Federal Government has agreed that these costs should be included in the F&A rate. This revised manual will assist institutions in determining the true cost of operating their respective animal research facilities, and encourage the use of cost analysis as a management tool to enhance operational efficiency and effectiveness. Potential manual users include:

This manual represents recommendations of the revision committee and should be applied as uniformly as possible. The committee recognizes, however, that it may not be feasible for some institutions to completely follow the recommended methodology in the manual. These institutions should be permitted to follow alternative procedures, provided they comply with applicable Federal cost principles.

For copies, contact:

NCRR Office of Science Policy and Public Liaison
301-435-0888 or
It is also available on the web at

This article appeared in the Animal Welfare Information Center Bulletin, Volume 11, Number 1-2, Summer 2000

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