> University 2 gets $100. $20 of it goes to admin, $40 to researcher, $40 to supplies and equipment.
This is not how it works; this would be 150% overhead. ($60 / $40).
Basically, if something is a shared utility (common lab maintenance, supplies that can't be metered and charged to specific projects, libraries on campus, etc.) then it's overhead.
Also included in overhead is administrative & HR expenses... and things like institutional review boards, audit and documentation and legal services needed to show compliance with grant conditions.
The reasons for high overhead are threefold:
1. Self-serving administrative bloat at universities and labs. We all agree this is bad.
2. Shared services in complex research institutions (IRBs, equipment maintenance, supplies, facilities). This is good overhead. We want more of this stuff, though we want it to be efficiently spent, too.
3. Excessive requirements and conditions on grants that require a lot of bodies to look at them. This is bad, too, but doesn't get fixed by just lopping down the overhead number.
Unfortunately, if you just take overhead allowance away suddenly, I think it's just #2 which suffers, along with a general decrease in research. Getting rid of #1 and #3 is a more nuanced process requiring us to remove the incentives for administration growth on both the federal and university side.
