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Cloud Services: Exemption from Indirect Costs

Learn about the exemption of indirect costs from cloud services for extramurally funded research, effective July 1, 2017.


Costs associated with Cloud Computing Services (research storage, managed services and cloud services) from Information Technology Services (ITS) or San Diego Super Computer (SDSC), or through direct contracts with Amazon Web Services, Google Cloud Platform (GCP), or Microsoft Azure via Marketplace, will be exempt from the application of the indirect costs (IDC) when acquired to support extramurally funded research.

UC San Diego is committed to supporting our research mission through policies that enable grant competitiveness. The aim is to incentivize researchers to choose the most appropriate solution to meet their computing needs, whether it be research storage, compute or contracted cloud services, without having to consider the inclusion of indirect costs. For example, in the past, PIs may have been fiscally incentivized to purchase their own equipment and thereby, with more capacity than needed, or enough equipment to meet “peak” loads, ultimately utilizing only a fraction of the capacity purchased. This results in elevated expenses and a proliferation of small, inefficiently used systems and higher costs overall. By offering state of the art infrastructure services through consolidated contracting, and relieving such costs from the application of IDC, UC San Diego is ensuring our researchers can stretch their limited research funding further to meet other critical needs. 


  • For researchers already working with ITS and SDSC for the services listed above, the charges reflected on the general ledger will be automatically adjusted commencing with the July billing.
  • For researchers contracting for AWS, GCP, or Microsoft cloud computing services through Marketplace, the Marketplace team will facilitate processing the account code changes to update the Purchase Order records. They have been provided a list of the POs funded by federal fund sources. The new account code is 637135 and will ensure that these expenditures will be exempt from the application of IDC. 
  • When developing budgets for new proposals, if the eligible cloud computing services are associated with the extramurally funded research, please include these costs in the modifications made to calculate the modified total direct costs (MTDC) so that IDC costs are not added to the budget. Read more about MTDC.

Federal Compliance with cybersecurity contracting requirements

If the research associated with the adoption of any cloud and shared computing services includes restricted data such as controlled unclassified information, the environment must meet federal cybersecurity contractual requirements. If such data is export restricted, please coordinate with UCSD Export Control to determine any export licensing requirements.

Helpful links

For information on SDSC services, contact Ryan Nakashima. For other inquiries, contact