Ken Williams, Yale University, Department of Molecular Biophysics and Biochemistry, New Haven, CT
How are rates set for the resources a core facility provides? Why is it so difficult to compare charges for seemingly identical services carried out by different facilities?
More than two-thirds of core facilities responding to a recent ABRF survey (1) indicated that they charge fees for services provided. Although many industrial core facilities are totally supported from funds other than those received from user fees, most facilities in universities and research institutions must recover at least a portion of their operating expenses and the usual mechanism is to charge users using a pre-established schedule of analysis and synthesis fees. While operating expenses would include all personnel, supply/reagent, and service contract/ equipment repair costs, they would not include capital equipment acquisition/depreciation or "overhead" costs such as utilities. Since the annual income from service charges for 57 responding academic core laboratories (1) represented only 51% of total annual operating expenses, the total cost of carrying out an analysis or synthesis in a core facility is, on average, nearly twice the fee that is actually charged to the investigator. There is thus a significant and important difference between the charge assessed for a given service and the total cost of providing that service.
How can rates be determined rationally? There are at least two approaches: 1) Prospectively, in which case all of the anticipated costs are estimated beforehand. 2) Retrospectively, in which case the actual costs that were incurred over a recent time period are divided by the number of analyses or syntheses that were completed. In our experience, prospective estimates are usually considerably lower than the actual cost that will be incurred. For instance, in the case of sequencing a 25-residue peptide we might prospectively estimate the cost as follows:
Supplies/Reagents: $3.00/cycle x 25 = $ 75
Salary/Fringe Benefits: 1/250 work days x $25,000 = $100
Service Contract: 2/250 work days x $10,500 = $ 84
Total: $259
The above estimate is only about one-quarter of the average retrospective estimate of $969 as determined by 70 core facilities that participated in a recent ABRF survey (1). Reasons for this discrepancy might include the cost of non-income producing operations such as time spent running standards or for research needed to optimize instrument performance; "down time" due to personnel vacation/sick days, lack of samples, instrument malfunction or sequences that run sufficiently long to prevent reloading the instrument until the following day; routine maintenance costs for HPLC columns, detector lamps, chart paper, glass fiber filters and waste disposal; and ancillary costs such as for secretarial and accounting support, copying charges, phone calls, and travel expenses to attend scientific meetings. Finally, the above calculation does not take into account time spent by the Director preparing grant applications to acquire the capital equipment or the time spent conferring with the principal investigator - both before and after the analysis is completed. Users rely on advice and recommendations as well as instruction by core facility staff in the design, execution, and interpretation of their experiments. While education is arguably one of the most important core facility functions, it is seldom included in the cost recovery calculations that form the basis for developing service charge rates. Obviously, this comparison suggests that in toto all of these latter expenses, which can be extremely difficult to estimate prospectively, actually contribute most of the cost of the analysis.
Just as it is difficult to prospectively estimate service charges (and hence to easily justify them to users) so too it is extremely difficult to compare charges assessed at different facilities. One reason for this is that the percentage of operating expenses recovered from user fees varies from <1% to 100% (1). Obviously, a facility that receives 80% of its operating expenses from the host institution does not need to charge as much for an amino acid analysis as a facility that receives no subsidy. Since this subsidy most often comes in the form of salary support, it is generally not easy for a user to make an accurate comparison of service charges assessed in different facilities. Further complicating this task is the large variability in the nature and extent of seemingly "identical" services at different facilities. For instance, a facility that specializes in extended sequencing runs carried out in the low picomole range would incur considerably higher costs in terms of optimizing instrument performance than a facility whose task it was to routinely screen batches of a recombinant protein by sequencing the first five residues at the nanomole level. This difference is undoubtedly reflected by the fact that a survey of core facilities (2) found that the percentage of time devoted to maintenance, calibration, optimization and technical development ranged from as little as 5 % to as much as 60 % of instrument time (the mean was 19.7 % + 10.9 % SD). Peptide synthesis provides an excellent illustration of potential differences in extent of service. Hence, while one facility may deliver a purified peptide as a pool from a reversed phase HPLC column without any analytical characterization, another might first subject aliquots of each preparative fraction to analytical HPLC (so as to make the best possible pool) and then characterize the final product by analytical HPLC, amino acid analysis (including cysteine and tryptophan determination), CZE and FAB mass spectrometry. In addition, the latter facility might synthesize at the 0.5 mmol (as compared perhaps to the 0.05 mmol level for the former facility) and routinely double or triple couple all synthesis cycles as well as guarantee the authenticity of the product and a 90% minimum level of purity. Although a recent survey (1) of core facility charges for synthetic peptides would not have discriminated between these two purified peptides, there is nonetheless substantial justification for assessing a higher charge for the more highly purified and characterized product.
Finally, no discussion of core facility service charges would be complete without recognizing that it is unreasonable to expect a biopolymer core facility to be self-supporting in terms of recovering 100% of its operating expenses from user fees. Hence, only 3 of 57 facilities surveyed (that reported user fee income and that also provided all of the necessary data) recovered sufficient funds from this source to cover their operating expenses (1). Service charges should therefore be considered to represent an important but certainly not the only source of revenue for core facilities.
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