Grants do not allow payment of any profit to the subgrantee. If the subgrantee subcontracts with a commercial (for profit) firm, the fee becomes an actual cost incurred by the subgrantee and is eligible for reimbursement if all other payment criteria meet the terms of the agreement.

Indirect Costs (IDC) or Facilities and Administrative Costs (F&A) are not considered profit and are eligible for reimbursement under certain circumstances. See “Indirect Costs (Facilities and Administrative Costs),” later in this section.