Pilot Program - Reduced F&A Charges for Cloud Computing Expenses on Research Grants

Page Updated: June 24, 2024

Researchers at UW-Madison use cloud computing for many different applications, in schools and colleges across campus. Cloud computing may offer better environments for certain purposes, for instance, HIPAA-involved work, research involving restricted data, or collaborative work between multiple institutions or organizations.

UW-Madison maintains contracts with the following cloud service vendors: Amazon Web Services (AWS), Microsoft Azure (Azure), and Google Cloud Platform (GCP). To encourage the use of such services when appropriate, the University is conducting a pilot program to provide a partial waiver of the F&A rate on cloud computing costs through these vendors on sponsored programs. See the RSP Notice on the Pilot Program.

The pilot will begin on July 1, 2022, last for four years, and will include:

  • Reducing the 55.5% F&A rate on cloud computing costs to 26%; in effect, waiving the “facilities” portion and charging the “administrative” portion, which is the equivalent of the off-campus rate.
  • Applying the waiver to new proposals and awards as of July 1, 2022. This may include new increments of funding received on or after July 1, 2022.
  • Careful tracking of cloud computing expenses, requiring all usage to go through UW-operated accounts.
    • Researchers and administrators must request a UW-Madison Cloud Account through DoIT to receive the reduced F&A rate. If costs are not associated with a UW-Madison Cloud Account, i.e., paid for with a purchasing card, they will be charged full F&A, not the reduced rate.
    • RSP will set up a separate project with a 26% F&A rate for cloud computing expenses through these vendors. Expenses must be charged to the designated account.
  • RSP and DoIT providing quarterly reports of cloud usage to the VCR and VCFA, which will include calculated lost F&A.

At the end of the pilot, data will be reviewed, and a determination will be made as to how to proceed going forward.

Guidance for Cloud-Based Computing Services

Investigators are required to use UW cloud computing services licensed through DoIT for their on-demand computing needs in order to receive the reduced F&A rate. UW-Madison has three approved and licensed services:

AWS - create an account

Azure - create an account

Google - create an account

Award Setup Process

For all new awards, with a start date of July 1, 2022 or later, which include cloud computing costs, a new Project ID will be set up specifically for those costs. The F&A rate charged to that project for cloud computing will be 26%.

Proposal Budgeting Process

Investigators putting new proposal applications together are encouraged to use cloud services for on-demand computing needs. When budgeting, please exclude the cloud computing services from the calculation for Modified Total Direct Cost (MTDC) F&A charges. Instead, calculate 26% on the cloud computing services and add to your total direct and indirect budget line items.

To help investigators and departments budget correctly for cloud computing services, the Budget Templates provided by RSP have been updated to account for the reduction in F&A. Please use these budget templates to help develop your proposal budgets.