Funding Mechanisms

Working with Us

UMTRI projects are supported by four funding mechanisms: contracts, purchase orders, gifts, and in the future, the Group Affiliation Program. Other mechanisms suggested by sponsors are always of interest.


Purchase Orders


Driver Interface Affiliation Program


Over 90% of the funds to support group work comes from fixed price and cost reimbursable contracts, often from vehicle manufacturers and suppliers with world headquarters outside of the United States. Those contracts may result from sole source discussions or competitive bids. Contracts range from $30,000 to $1,000,000 with most projects in the $50,000 to $200,000 range. To put costs in context, it costs about $50,000 and takes about 5-6 months to plan a basic experiment in the simulator, make the software and hardware modifications needed, run pilot subjects, run about 20 test subjects, reduce the data, generate statistics, figures, tables, and explanatory text, integrate them into a technical report, and have the report reviewed and approved. More expensive projects may involve on-the-road experiments or multiple experiments. For us, the ideal project would be about $250,000 and take 3 years to complete, though 1-2 year projects budgeted about $75,000-$150,000 are more typical.

For experiments, costs depend on how soon the results are needed, how complex the test procedure is, how many people are to be tested, and many other factors. It is often assumed by those unfamiliar with human factors research that most of the project time is spent testing people. However, only 10-20% of the time is spent on such. Since virtually every experiment is a custom application, about 30-50% of the time is spent planning and designing the experiment (developing test materials and protocols, writing software, building hardware, etc.). The remaining 30-50% is associated with analyzing the data and writing a detailed technical report.

Since UMTRI is a self-supporting unit of the University, a sponsor of UMTRI research pays the full cost of the work. Sponsors are usually billed on a monthly basis by the University's Financial Operations Office.

Costs include salaries and benefits for the research team and the support staff. University labor rates for personnel tend to be somewhat lower than those found in industry. Some in industry associate University research exclusively with student work. While students play a key role, projects are led by Ph.D. level scientists and supported by a professional research staff of engineers and technicians. Research funds cover the portion of their time (and salaries) spent conducting the research. Scientists do not receive "extra" compensation for performing sponsored research. Further, because students are performing in a professional capacity, they are paid for their time, and consistent with the rules of the graduate student union, projects also pay their tuition.

Also covered are all costs associated with supplies, telephone and faxes, payments to subjects, travel to test sites and professional conferences, equipment, software, vehicle maintenance, fringe benefits and indirect costs. Fringe benefits are about 48% of the billable hourly rate.

Indirect costs are currently 52.5% of everything except for equipment. For off site projects and research supported by the State of Michigan (funding the University as a public institution), other rates may be applicable. Indirect costs cover space, heat, furniture, contract administration, legal support, and billing. The indirect cost rate is established by negotiation between the University and its cognizant federal agency, the Department of Health and Human Services. Recognized costs are determined in a standardized procedure specified by the federal government's Office of Management and Budget. Indirect costs rates vary among universities because of differences in the level of state support, the extent to which high technology is supported, the age of the physical plant, and the size of the library system. Research universities tend to have higher indirect costs rates than teaching universities because a more sophisticated physical plant is required. (Laboratories cost more than classrooms to maintain.). The University of Michigan's indirect cost rate is comparable to its peer institutions (e.g., MIT, Cal Tech, Harvard, Berkeley, etc.) and is well below industry levels.

Based on current federal policy, anything costing less than $5000 is generally not considered equipment. Group policy is generally not to charge fees for using equipment the group has, none of which is rented. There are no capital funds for equipment and equipment is not amortized. In exchange, if a project needs new equipment, the sponsor pays the full cost, though cost sharing is encouraged with other sponsored projects. Equipment purchased using the University's tax-exempt status or educational discounts should remain University property. Equipment costs are usually 5-15% of the total cost of a project. Proposals describe in detail equipment needs and costs. Projects are expected to maintain research equipment at current state-of-the-art levels.

Most scientists and people on their research teams attend 2 to 3 nonlocal technical conferences per year to present and acquire information related to their research interests, and as part of their professional capacity maintenance and development. UMTRI personnel are very careful in such discussions not to release proprietary details of current projects. Face-to-face discussions between researchers, research assistants, and their peers have proven to be invaluable sources of feedback and new ideas. This type of traveling will be supported by your research project and is an expected condition of employment. Travel expenditures are described in research proposals and budgets.

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Purchase Orders

Purchase orders (POs) are intended for very small projects (under $10,000) typically involving less than a week of a scientist's time. Such projects typically involve visiting a sponsor's local site several times to provide input on the design of a product. They may also be used to cover the cost of planning a large project where delays may be expected in funding (to cover initial costs) or where planning costs are quite large.

Typically the purchase order is mailed or faxed directly to UMTRI by the sponser's purchasing department. The purchase order should include one or two sentences on the work requested along with the period over which it is to be effective, the amount, and materials to be provided by the sponsor. The sponsor is billed for work as costs are incurred. If a more detailed legal agreement is needed, then a contract must be prepared, which is much more time consuming, and requires the involvement of the contracts office at both the University of Michigan and the sponsor.

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Only a small portion of the funds received by UMTRI are in the form of gifts. Gifts have the advantage of providing considerable flexibility in spending and accounting, and provide the most rapid mechanism for establishing an account. Further, in recognition of the minimal administrative cost for gifts, the indirect cost (overhead) on gifts is only approximately 10% (versus 52.5% for contracts). Because of the nature of a gift, the donor can only specify in very general terms how the gift is to be used (e.g., for studying driver workload). Where a specific project is intended, a contract is the appropriate funding mechanism. Gifts of both funds and equipment (cars, instrument panels, computers, video equipment, etc.) are tax deductible and actively encouraged by the University.

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Driver Interface Affiliation Program


The Driver Interface Affiliation Program is targeted towards vehicle manufacturers and suppliers, electronics software and hardware developers, and those providing vehicle-related data and communication services. The program conducts basic and applied research concerning the safety and usability of driver interfaces for future motor vehicles.

Benefits and Implementation

One vision of the future is that the sales of telematic devices and services will be a large source of motor vehicle profits because of the safety and usability of the driver interface. Hence, early access to research results pertaining to driver interface safety and usability, along with opportunities to exchange ideas among other affiliates and UMTRI researchers, provides a significant competitive advantage. Affiliates, guided by the expertise of UMTRI researchers, will identify research topics at annual meetings. Topics of mutual interest will be explored using pooled funds to maximize cost effectiveness. Findings may eventually be published in the public domain, but after affiliates have had time to apply them.

Program Content

Systems of interest include navigation, traffic information, mobile phones, email, internet access, and others. Candidate research topics include (1) normal (baseline) driving behavior, the visual demand of driving and workload assessment, (2) the structure (e.g., menu design) and format of information to minimize driver demands, (3) the selection of input/output devices (voice, HUDs, wearable computers), and (4) interface integration. Baseline driving data is critical for assessing the impact of new devices and services. Implications of the research for SAE and international standards will receive particular attention. The research will be performed by staff and students in the UMTRI Human Factors Division. Key UMTRI staff include Dr. Paul Green, Dr. Barry Kantowitz, and Dr. James Sayer. The Human Factors Division has been conducting driver interface research and participated in SAE/ISO standards efforts for over 20 years. The Division has been engaged in ITS/telematics research since its inception in the early nineties. A list of driver interface publications and a complete description of UMTRIs facilities, including our driving simulator and our instrumented vehicles, can also be found on this website.

Funding and Commitment

Each program affiliate will commit $20,000 per year for a minimum of two years to maintain project continuity. Affiliates will sign a simple commitment agreement. Affiliates will not be asked to divulge confidential information. Affiliates may also elect to address topics of unique interest to them by funding contract research at UMTRI independent of this program.

Sponsors (as of January 2001)

We would like to welcome Motorola as our first sponsor.

Affiliate Agreement:


Word 95/6.0 (.zip)

Word 95/6.0 (.sit)


Contact Information

Dr. Paul Green
UMTRI-Human Factors
2901 Baxter Road
Ann Arbor, Michigan 48109-2150


Phone: 1-734-763-3795
Fax: 1-734-764-1221

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Posted by Grason on May 8, 2017