SAC Overhead Discussion Andrew Sonnenschein 10192020 Overhead rates

SAC Overhead Discussion Andrew Sonnenschein 10/19/2020

Overhead rates– an issue for SAC? • Overhead rates determine the cost of research at Fermilab and therefore the amount of research we can do. • Rates have been rising steadily over the last decade. • Rising costs are an incentive for DOE and Fermilab project managers to move the work elsewhere. • This is especially true in some areas (Cosmic Frontier, Theory…) where work does not require unique Fermilab accelerator facilities. • May be considered an important strategic issue for the lab, but does not appear to have been widely discussed as such.

Overhead Math Fully Loaded Labor Rate = Pay Rate*(1 + VAC + OPTO)*(1+FRINGE)*(1+PS)*(1+GA)*(1+CSS)*(1+LDRD) Direct Costs Cost Factors • VAC- Vacation. • OPTO- Other Paid Time Off. • FRINGE- Fringe benefits. Includes health care, retirement. • PS- Program Support. Division and department administration. • CSS- Common Site Support. Facilities, roads, grounds, electricity. • GA- General and Administrative. Directorate, communications, finance, HR… • LDRD- Laboratory Directed R&D. Indirect Costs

Combined Direct & Indirect Multipliers 2010 -2021 • Direct rate multiplier includes Vacation, OPTO, Fringe. • Indirect rate includes Program Support, General & Administrative, Common Site Support and LDRD. • Indirect rate grew from 67% to 100% over a decade. 120, 0% INDIRECT 100, 0% 80, 0% 100. 1% 67. 3% 60, 0% DIRECT 40, 0% 20, 0% FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 * Before 2015 each division had a different Program Support factor– the one used here is the number for PPD.

Possible Questions for SAC Study What are the reasons for the rise in management and site support costs? What do we expect going forward? Are we competitive with peer institutions? How have rising costs affected the size of Fermilab’s direct-funded scientific and technical staff? • Is the current way that indirect costs are distributed optimal for our science program or are there better ways to do it? • • • For example, consider a reduced overhead factor for postdocs, which is the practice at some other labs. • Decisions on indirect cost allocation affect what types of work are done in-house vs outsourced. Examples: Machine Shop, Theoretical Physics, Data Analysis.