Stanford University (A): Indirect Cost Recovery
1994 | Case No. A155A
In July of 1990, Stanford University enjoyed wide praise for cutting costs. Less than one year later, Stanford was at the center of a roiling dispute over indirect costs billed to the government for federally sponsored research. The case introduces students to procurement and audit from several perspectives-the regulator, the purchaser, and individuals within the supplier organization. The determination of costs under procurement regulations and contracts receives special attention. The not-for-profit setting is novel. Principal issues for discussion are: (i) The costs and benefits of various forms of procurement contracts; (ii) The effect of the cost allocation scheme on the incentives faced by individuals within Stanford University and the government; and, (iii) The role of auditors and audited cost information in the procurement process. The case also raises certain ethical and political issues.
This material is available for download by current Stanford GSB students, faculty, and staff, as well as Stanford University alumni. For inquires, contact the Case Writing Office.
Available for Purchase