The University of Arizona

Cost Bases

Always use a Modified Total Direct Cost (MTDC) base when you are using rates from the University of Arizona Facilities & Administrative (F&A) cost rate. Use a Total Direct Cost (TDC) base when you are using a reduced F&A rate and/or when the program announcement specifies.

Some sponsors will only reimburse an F&A rate lower than the federal negotiated rate. In these instances, the F&A rate should be applied to a total direct cost (TDC) base. There may also be instances where a sponsor requires that specific direct costs be excluded from the F&A cost calculation (Total Direct Costs less Exclusions).

Please see the Facilities and Administrative (F&A) Costs page for information on exceptions to the University’s negotiated F&A rates.

Contact Sponsored Projects Services for assistance.

Modified Total Direct Cost (MTDC)

Modified Total Direct Cost (MTDC) is defined by the F&A rate agreement and consists of all:

  • Salaries and wages
  • Fringe benefits
  • Materials and supplies
  • Services
  • Travel, and
  • Up to the first $25,000 of the each subrecipient (regardless of the period covered by the subrecipient)

The following are excluded from the MTDC calculation:

  • The portion of each individual subaward greater than $25,000. An individual grant or contract may include several subawards.
  • Equipment with an estimated life of one or more years and an acquisition cost of $5,000 or more, including components for fabrication of equipment which cost $5,000 or more,
  • Patient Care Charges
  • Tuition remission
  • Rental Costs of off-site facilities
  • Capital Expenditures

To determine the MTDC base, take the total project direct cost, subtract any costs that are listed as excluded, and multiply that new total by the F&A rate.

 

Total Direct Costs (TDC) 

Total direct costs (TDC) include all costs charged to a sponsored project, excluding F&A costs. To determine the total project cost base, the TDC is multiplied by the F&A rate to determine the F&A costs. The TDC and the F&A costs are then added to obtain the total project costs.