Maximizing Reimbursement of Indirect Costs: a Mathematical Programming Approach

One of the critical financial planning issues for governmental and not for profit organizations is how to maximize their grant rev­ enues. An important part of that process is maximizing the reim­ bursement of their indirect costs from federal and state govern­ ment sources. The federal government permits organizations to obtain reim­ bursement from the government for implementing its programs under cost reimbursement contracts. Generally, these are con­ tracts where the price received by the contractor is based on the actual costs incurred by the contractor. For example, universi­ ties whose faculty obtain grants from the federal government can