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Comment by supernova87a | Hacker News Reader

Why don't grant funders apply a single overhead % to all recipients, so that those who are more efficient and productive with their funds benefit for it? The way it is now, you're almost incentivizing those who are inefficient / expensive to get more so because you're rewarding them with more $.

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Because different institutions have different needs. As a particular example, the Scripps Institute has an astonishingly high, >100% overhead rate, because in order to do their research, they need to be able to maintain research ships. Which are, unsurprisingly, very expensive.

Edit: Per the post below, this is incorrect - don't remember where this information lives in my head. But the general point remains the same - because different institutions will have different costs.

Should large capital expenditures like that be funded as explicit parts of the grants that use them (like an amortized user fee), or as items requesting funding on their own? You would think such things would deserve their own approved budgets (for the funders) and not be absorbed into a hard-to-dissect overhead factor.

The problem for large capital expenditures is they will last well beyond the grant, but they need to exist in order for the grant to be done. But a lot of funders don't want to pay for things that will last well beyond the project they're paying for. Indirects are one way to do this. Large capital acquisition grants are another.

Actually, the Scripps Institution of Oceanography has indirect costs of 55%, in spite of the four research vessels that it maintain. [1][2]

In contrast, the Scripps Research Institute, a La Jolla neighbor with no ships, has indirect costs that were estimated at 89.5% in 2014. [3]

[1] https://scripps.ucsd.edu/cimec/resources/pre-award-informati...

[2] https://scripps.ucsd.edu/ships/scripps-fleet

[3] https://datahound.scientopia.org/2014/05/10/indirect-cost-ra...

Happy to be corrected.

This is also why cost plus contracts are a disaster for governments, and the US is moving away from them slowly.

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