Research Contracts

 

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A university incorporated in accordance with the Higher Education Act, 1997, and the statute of the University of Cape Town, promulgated under Government Notice No. 1199 of 20 September 2002.

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NIPMO Full Cost Matrix Approval Certificate

Send an email to Director.RCI@uct.ac.za should you need a certificate from a previous year.

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Due Diligence Platform

Compilation of due diligence questions posed by funders and/or lead implements of research

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Research 

• UCT policy for research data management 
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• UCT research ethics code for research involving human participants
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• Faculty of Health Sciences use of animals in teaching and research: standard operating procedures 
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• Register of ethics approvals for research conducted under the auspices of UCT
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• Appeal to Ethics in Research Committee: standard operating procedure 
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• Naming of inter- and/or intra-faculty teaching or research groups
• Authorship practices policy
• UCT policy and procedures for breach or research ethics codes and allegations of misconduct in research

       - September 2014 (current, active version)

• UCT policy and procedures for breach or research ethics codes and allegations of misconduct in research

       - December 2023 (updated version, implementation date to be communicated)

• Policy statement on safeguarding in research - October 2022
• Policy on SFARS - October 2022

Social responsiveness 

• Social Responsiveness Policy Framework 

Budgeting consists of a Costing and Pricing Component. It is an iterative process between the Principal Investigator (PI) and the Faculty Research Finance and in certain cases Research Contracts & Innovation to ensure that projects are correctly costed and priced, to ensure that Faculties are aware of any contribution they may have to make, that costs adhere to the University's Costing & Pricing Policy, National Legislation and the Contractual Partner’s terms are considered.

Principles

The University of Cape Town adopts a transparent methodology for costing research and research-related projects based on the Universities South Africa (USAf) recommended Expenditure Apportionment method as endorsed by the National Intellectual Property Management Office (NIPMO).

The Full Cost of all Projects must be determined, using the University’s standard costing template before determining the Price.

The Final budget needs sign-off at faculty level before submission to a Client/ Contractual Partner or Research Contracts & Innovation (RC&I), as the authorised signature of research and research related agreements.

Full Cost of a Project

There are three components of the Full Cost of any Project:

• All Direct Costs associated with the Project, including all costs that are not included in the 
university overhead. 

• Time of all University Members involved, calculated using the Median Cost to Company (CtC) per annum (or the Rate-for-the- Job as determined by the Remuneration Review). The Median CtC is for the particular class of researcher (Professor, Associate Professor, Senior Lecturer, Lecturer etc.).
• The Indirect Cost Recovery Rate (ICRR) as applied to the Modified Total Direct Cost (MTDC) .

Full Cost means the project has been budget at cost i.e. what it cost the University to  execute the project  and there no profit (Full cost plus a margin) build in.

Understanding the true cost of a research project is critical to securing the correct level of funding in support to a project’s research objectives. Whilst a certain level of estimation is expected for some costs (consumables, travel etc.), others costs (e.g. staff, equipment) must be carefully costed to ensure sufficient funding is secured.

Price of a Project

The price of a Project does not necessarily equate to the cost. For example, Projects funded by major international competitive schemes (e.g. National Institute of Health (NIH, Bill and Belinda Gates Foundation etc.) and national schemes (e.g. NRF, Sarchi Chairs, MRC SHIP etc.) are priced in accordance with the funding rules of the relevant scheme.

On a case by case basis, the dean (or designee) may approve a reduction or complete waiver of Indirect Cost given sufficient justification and where there is no claim to the IP from the funds provider. Instances recognized to fall within this category include, but are not limited to:

• Selected start-up projects where it is anticipated that the collaboration will result in future growth of external funding.
• Cases wherein Indirect Cost is an eligible category of cost-share.
• Cases wherein the benefit to the University outweighs the loss of Indirect Cost. For example, the project represents an important university outreach effort or a mandated activity that the university would otherwise be paying for.
• Cases wherein a large percentage of the project budget involves student assistantships and materials and supplies that support student activities.

Pricing below Full Cost means the project is been subsidised by the University/Faculty.

Projects that require the assignment or an exclusive license to the Intellectual Property generated to the fund provider must under all circumstances strive to be done at Full Cost plus a margin. If such conditions are required for a Project to be done at below Full Cost NIPMO’s approval must be sought .

Note: Covered in Costing & Pricing Policy: 1) PRINCIPLES AND PROCESSES WHEN PROJECTS ARE PRICED ABOVE FULL COST 2) PRINCIPLES AND PROCESSES RELATED TO THE MANAGEMENT OF GENERAL OPERATING BUDGET (GOB) STAFFS’ SALARIES BUDGETED FOR ON A PROJECT 3) PRINCIPLES AND PROCESSES WHEN IP IS ASSIGNED OR EXCLUSIVELY LICENSED TO FUND PROVIDER UNDER BELOW FULL COST TERMS

Indirect Costs

Indirect costs are those costs not readily identified with a specific project or organizational activity but incurred for the joint benefit of both projects and other activities.

The University of Cape Town adopts a transparent methodology for determining Indirect Cost Recovery Rate (ICRR) based on the Universities South Africa (USAf) recommended Expenditure Apportionment method as endorsed by the National Intellectual Property Management Office (NIPMO). The Expenditure Apportionment  method apportion the university’s non - faculty support costs between research and other activities, taking into account the ratio between Research Direct Costs and Total University Costs.

It does not recover the support provided by the academic department or faculty office because of the current difficulty in calculating such support with sufficient confidence as to its reliability. Where feasible, such costs should be included with the direct costs of the project.

In accordance with the IPR Act (No. 51 of 2008: Intellectual Property Rights from Publicly Financed Research and Development Act, 2008 ), the IDRR must be recalculated biennially, and needs to the approval of NIPMO. The current rate is 28% for on-campus activities and 19% for off-campus activities.

Modified Total Direct Cost (MTDC)

MTDC is the recovery base used by UCT to recover the indirect costs.

It consists of the total direct costs of the project, less:

• Bursaries;
• Subcontracting and subgrantee/consortium partner payments/costs greater than R250,000  per subcontract;
• Equipment costs greater than R250, 000 per item.

Example

ITEM	Direct Costs (R )	Modified Total Direct Cost ( R)
Salaries	1 000 000	1 000 000
Consumables	200 000	200 000
Travel	20 000	20 000
Post Grad Students (Bursaries)	200 000	0
Subcontract 1	500 000	250 000
Subcontract 2	750 000	250 000
Equipment	250 000	250 000
Equipment	800 000	250 000
TOTAL	3 720 000	2 220 000
Indirect Cost (28% on MTDC)	621 600	621 600
Total Project Cost	4 341 600
Effective ICRR	16,7%

Value Added Tax

Value-Added Tax (VAT)  is an indirect tax on the consumption of goods and services in the economy.

Subject to certain conditions, the vendor must then charge VAT on supplies of goods and services made by it (output tax). VAT is only charged on taxable supplies made. Taxable supplies are supplies for which VAT is charged at either the standard rate (currently 15%) or zero rate (0%). There is a limited range of goods and services which are subject to VAT at the zero rate or exempt from VAT.

The vendor will also be entitled to deduct VAT charged to it (input tax) when incurred for making taxable supplies. Under limited circumstances a vendor may claim a deduction (notional input tax) on a supply made to it by a business that is not registered for VAT.

VAT is non-cumulative, meaning that a credit/deduction is allowed for VAT paid in previous stages, within the production and distribution chain. The vendor is required to pay the difference between the output tax and the input tax or claim a VAT refund where the input tax exceeds the output tax.

VAT is therefore, charged at each stage of the production and distribution process and it is proportional to the price charged for the goods and services. VAT is also payable on the importation of goods and on imported services.

Institutions of Higher Education make both taxable and exempt supplies. The identification and classification of activities between exempt and taxable supplies is due to the highly integrated nature of activities not always apparent. There are few precedents and clear guidelines to clarify areas of uncertainty and to ensure consistency in the VAT treatment by education institutions.  The educational sector is therefore considered as one of the most complex industries from a VAT perspective.

Researchers and those preparing funding proposals must make sure they are fully aware of the terms under which funding is awarded.  A wrong assumption, interpretation and decision can lead to a shortfall in budget, which is not easily rectifiable subsequently.  If there is any uncertainty, please contact RC&I through one of the Legal Advisors.  RC&I works closely with Faculty and Central Finance on these issues, and RC&I also in close communication with our tax consultants, who are consulted in the event of uncertainties arising.

The VAT Decision Tree summarises the thought process to determine the VAT status of a project

Questions:

Is there a SARS Ruling for this Funder? What kind of research or activity is involved: Basic Research, Applied Research or Contracts Research (Service)? Is the funding from a Local or foreign source? If Government (& Statuary Bodies) funding is it a grant or Contract Research? Are students involved – directly or indirectly? (Whether such involvement is of an administrative nature or where student participation in such projects is not a requirement for his/her specific degree, it is still considered as student involvement)

Definitions

Basic Research Experimental or theoretical work primarily to acquire new knowledge of underlying foundations of phenomena and facts No particular application or use in view Constitutes supply of exempt educational services or non-enterprise activity Applied Research Project primarily for specific practical aim or objective Should result in the application of new or existing knowledge into a process or product Meets the requirements of the definition of “enterprise” for VAT purposes Contract Research Contractually liable to deliver a service/product Funder entitled to research outputs.

The following percentages apply to calculate input tax in relation to research activities and Fund Attributes:

Type of Research	Input tax treatment	Fund Attributes
Basic	None	Exempt
Applied (Local)	50 per cent of input tax deductible	Z/50%
Applied (Foreign)	50 per cent of input tax deductible	F/50%
Contract (student involvement) - Local	50 per cent of input tax deductible	V/50%
Contract (no student involvement)- Local	100 per cent of input tax deductible	V/100%
Contract (Studentinvolvement)- Foreign	50 per cent of input tax deductible	F/50%
Contract ( No Student involvement)- Foreign	100 per cent of input tax deductible	F/100%

Fund Attributes

VAT on Imported services (Foreign Subcontractors/Consultants)

In terms of section 7(1)(c) of the Tax Act, VAT is levied on the supply of "imported services" by a person. The VAT must be paid by the recipient of the imported services. The term "imported services" is defined as a supply of services made by a supplier who is not a resident, or carries on business outside of the Republic, to a recipient who is a resident of the Republic to the extent that the aforementioned services are not Therefore, the person who acquires imported services from a foreign supplier for final consumption must account for VAT at the standard rate in terms of section 7(1)(c) to the extent that the services are used or consumed for purposes other than the making of taxable supplies (for example, exempt supplies). used or consumed in the Republic for the purpose of making taxable supplies.

What this means is that a VAT will be debited/charge to research fund from which a subcontractor/consultant is paid. The VAT amount can be considered an expense for budgeting purposes.

Example

As part of a research project a survey needs to be done in Uganda, which requires the interviewing of a thousand local residents. An Ugandan company, who charges R100 per interview is appointed.

The payment due do the company is R100 X 1 000 = R100 000.  VAT on R100 000 is R14 000, and the amount payable to SARS. The total cost to the

Research Fund is R100 000 + R14 000 = R114 000.

NOTE:

This is not applicable to a sub-awardee, which can be defined as an co-applicant in a funding application or is recorded in the application as an collaborator on the project and accordingly acknowledged by the Funder.

 

Policy for Costing and Pricing of Research Related Contracts - 2016

UCT's Approach to the Full Costing of Projects

The costing template is open to UCT staff only and can be downloaded below or email innovation@uct.ac.za for a copy:

UCT Costing Template

Temporary Confidentiality of a Doctoral Thesis

Students who wish to apply to the Doctoral Degrees Board for a thesis submitted for examination to be subject to a period of confidentiality must do so on the prescribed form (DDB 008).

Filing an Invention Disclosure

Should you wish to file an Invention Disclosure, download the Invention Disclosure Form.

Registered Designs

Should you wish to register a design, download the Design Disclosure Form.

Software 

Should you wish to protect your software, download the Software Disclosure Form.

Data Transfer Disclosure Form

To download the Data Transfer disclosure form, click here.

UCT INBOUND Material disclosure Form

To download the Inbound Material disclosure form, click here.

UCT OUTBOUND Material disclosure Form

To download the Outbound Material disclosure form, click here.

IBF Expression of Interest Form

To download the Expression of Interest form, click here.

UCT Lab Notebooks

RC&I prints UCT Laboratory Notebooks for use by our research community. These books are compliant with the requirements for proof of inventorship and intellectual property rights. Laboratory notebooks are available at R35 each to UCT staff and students and can be ordered from RC&I by Departments, Researchers or Research Groups - ideally in blocks of 10 to minimise admin. Download the form complete it and email to Yandi Sopete together with a copy of your journal transfer.