Working with External Customers

Service center core facilities are created to support the sponsored research of the university and are not allowed to operate for a profit. The university does realize that for a service center core facility to operate efficiently and keep costs down, it may offer its services to external users, especially where there is excess capacity. However, it is important for the service center to have a mechanism in place to track costs to insure that the federal government is not burdened with higher rates.

The service center core facility can charge rates in excess of their approved rates to nonfederal external users, provided that the revenue stays in the service center core facility and is factored in to the future rates. This additional surcharge should only be used to offset the additional costs that the service center incurs as a result of dealing with external parties. The service center core facility should continue to operate at a break-even point.

If sales to external parties are expected to become a substantial part of the service center core facility business, then it should account for it separately from the service center. In this case, the service center will be required to demonstrate to the Office of Cost Analysis that it has the systems in place to properly divide expenses between the two accounts.

More Information:

Unrelated Business Income Tax

If the university, as a tax-exempt entity, carries on a trade or business that is not substantially related to our mission, then we may be subject to unrelated business income tax (UBIT). Service center core facilities should be aware that sales to external parties may trigger this tax. Questions regarding UBIT and sales tax can be directed to the Tax Office.

Three elements must be present for an activity to be considered unrelated to the university’s tax-exempt purposes:

  1. The activity must be a “trade or business.”
  2. It must be regularly carried on.
  3. It must not be substantially related to the university’s exempt purposes.

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Process to Begin Work with External Customers

Please review the following questions to determine what steps are necessary prior to beginning work with an external customer.

  1. Will Johns Hopkins faculty, fellows, staff, or students be contributing intellectually to the project or data collection? Will any JH intellectual property be used in the provision of services? Or, could there be any JH claim to intellectual property resulting from the use of services or instruments?
    • If no, please proceed to the next question.
    • If yes, please contact the Office of Research Administration to determine if this work requires a research collaboration agreement.
  2. Will the work involve non-JH personnel working in your facility?
    • If no, please proceed to the next question.
    • If yes, please obtain the required visitor appointments and approvals through your departmental Human Resources.
  3. Will the customer be providing data and/or materials (software, chemicals, monoclonal antibodies, cell lines, transgenic animals, etc.) to analyze and/or test?
    • If no, please proceed to the next question.
    • If data and/or materials are sent to you, please contact Health, Safety, and Environment Office and/or the Animal Care and Use Committee to determine whether this transfer of materials requires their approval. 
  4. Will the external customer be using a purchase order or a credit card to purchase their services or instrument use time?
    • If the external customer is using a Purchase Order, please create an invoice in SAP using the FV70 process. Please contact your finance office if you have further questions.
    • If using a credit card, please follow the instructions on the Treasury Office website to create a new customer account or process through the iLab core management system if your core facility has implemented the program.

If you have additional questions, please contact the Tax Office at [email protected] or 443-997-8688.

Rates for External Customers 

Johns Hopkins Research Core Fee Structure

User TypeUser DescriptionFee Structure
JHU InternalAll entities using internal orders or cost centers for purchases. Rates ARE NOT dependent on sponsored and non-sponsored funding source.Direct Costs
External -  Academic*Non-profit academic medical institutions project specific activities. Rates ARE NOT dependent on sponsored and non-sponsored funding source. Direct Costs
External  - FastForward / Startup PartnerTenants of the Johns Hopkins Bioscience Park and FastForward startups with up to $10 million in capitalization.**Direct Costs plus 20% 
External – Non-Academic (Contracting Directly with the Core)All for-profit commercial business and institutions including pharmaceutical companies.

Minimum of Direct Costs plus applicable Indirect Cost rate (72%) and a maximum up to market rate if it exceeds Direct Costs plus IDC. 

*This applies to most non-profit organizations that receive any type of federal funding

**To Verify Capitalization of Fast Forward / Start Up Partner, please contact Brian Stansky or Mark VanderZyl in JH Tech Ventures