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To all the core administrators out there -

I'm interested in hearing if anyone has tackled the puzzle of determining if it is beneficial to charge "less-than-direct-costs" to external users when you have excess capacity to fill in a shared research facility.  At what level of excess capacity does "subsidizing" external clients become beneficial, if at all?  The question comes up often enough that I've decided it is worth giving it some thought.  

Happy to discuss more offline with anyone interested.

All the best,
Julie

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Julie Auger
Executive Director, Research Operations
Salk Institute for Biological Studies
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Dear Julie,

That's a great question and one we've been thinking about as well. At our facility, external users are welcome, but they usually pay the full internal rate plus 25% to cover overhead and prioritize internal use.

That said, if we're not reaching the desired internal capacity and utilization drops below ~70%, I think it's worth considering reduced rates. Especially if it helps build relationships, foster collaboration, attract future funding opportunities or, perhaps most importantly, increase visibility.

If you have specific expertise and available staff capacity, collaborations with vendors can also be a strategic option. For instance, testing new consumables with reimbursed staff and instrument time not only generates income but also strengthens relationships with vendors and keeps your facility at the forefront of innovation.

We haven't formalized a threshold yet, but I'd be very interested to hear if others have created clear models or decision frameworks around this.

Best,

Marjolijn

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Marjolijn Hameetman
BSc.
LUMC
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Hi Marjolijn,

The ~70% capacity is a useful target to consider.  I have not yet done the calculation, but am curious what the math would tell me if I calculated filling that excess capacity.  I'm trying to think about that equation and the options:  charge total direct cost and drop the IDC; or charge less than total direct cost (subsidized) but then charge IDC (some of which comes back in Institute subsidy to the core).  As a small research institute (50 faculty) with equipped cores, we often have excess capacity which is supported by the Institute.  So finding the right balance would be useful.

All the best,

Julie

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Julie Auger
Executive Director, Research Operations
Salk Institute for Biological Studies
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Original Message:
Sent: 04-17-2025 02:47
From: Marjolijn Hameetman
Subject: External users, external rates & excess capacity

Dear Julie,

That's a great question and one we've been thinking about as well. At our facility, external users are welcome, but they usually pay the full internal rate plus 25% to cover overhead and prioritize internal use.

That said, if we're not reaching the desired internal capacity and utilization drops below ~70%, I think it's worth considering reduced rates. Especially if it helps build relationships, foster collaboration, attract future funding opportunities or, perhaps most importantly, increase visibility.

If you have specific expertise and available staff capacity, collaborations with vendors can also be a strategic option. For instance, testing new consumables with reimbursed staff and instrument time not only generates income but also strengthens relationships with vendors and keeps your facility at the forefront of innovation.

We haven't formalized a threshold yet, but I'd be very interested to hear if others have created clear models or decision frameworks around this.

Best,

Marjolijn

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Marjolijn Hameetman
BSc.
LUMC
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This is something I'm wrangling with as well. As Marjolijn mentioned, there are a lot of benefits to filling unused capacity. It might even be worth considering solely for facilitating new opportunities, techniques and relationships that ultimately will benefit the internal users. 

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Andy Chitty
Executive Director, MGB Research Cores
Mass General Brigham
Boston MA
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While I get the potential logic here, I struggle with it. Cue the old saying: 'We lose money on every sale, but we make up for it in volume.'

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Rand Haley
University of Louisville
Louisville KY
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