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Thursday, October 15, 2009 8:46:38 PM
"Dear Hank,
Thank you for your help. Just one follow-up question. What is the cost share for the DOE grants? A percentage of the award?
Thanks again,
SNOW"
Mr. Eggink's reply:
"Depends on what the grant is for. Normally for education and outreach there is a 0% cost share requirement, for R&D it's usually a 20% cost share requirement, for demonstration or use of a commercial off the shelf technology it's a 50% cost share requirement.
Hank"
Another follow-up by me:
"Thanks again for all your help. In the case of this specific grant, I take it areas 1, 2, and 5 would fall under the "demonstration of a commercial off the shelf technology", and that would put it in the 50% bracket. Is that correct? Also, just so I'm clear. The company that would receive the grant would need to come up with 50% match of the award amount, but they would still receive the full grant, right? So for instance, let's say a $25M grant is awarded to a firm. I would imagine they would need to come up with $12.5M to get the grant, but then the total project would have $37.5M in financing. Does that sound right?
Thanks,
SNOW"
And Mr. Eggink's reply:
"Your math is correct for COST MATCHING but not COST SHARING which is what our FOA required. Cost sharing is based on total project cost (fed plus recipient $). Cost matching is based on total Federal $ and requires a match at a percentage of the fed $.
Under cost sharing (using your $25M Grant as an example), a 50% cost share requirement would be $25M Fed and $25M recipient for a total project cost of $50M.
Under cost matching (which is used by several agencies other than DOE, and again using your $25M grant as an example) a 50% cost match requirement would be $25M Fed and $12.5M recipient for a total project cost of $37.5M.
Hank"
So for the bio-fuel grant, the company would need to match the grant dollar-for-dollar. Could this be the reason why the A/S raised from 3 billion to 6 billion? I would like to think so. Also, keep in mind that SRE/Pinnacle aren't the only ones going together for this grant. SCSU might also have some money to gather the cost share amount. Then again, if SCSU is the primary recipient of the grant, it may fall under the "educational" bracket of cost sharing, which would be 0%. It's hard to say at this point. Anyway, it's something else to chew on. We'll know all the answers by mid to late November.
-Snow
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