Mandatory Annual Escalation Exemptions

Institutional policy requires 3% escalation for salaries and fringe benefits in the out years of proposed sponsored project budgets. Sponsor documentation restricting escalation may permit deviation from this practice.

For example, NASA’s Guidebook for Proposers states that if an applicant’s NICRA includes fringe benefit rates, NASA will use these rates for the grants and cooperative agreements awarded to the recipient. Further, there is a statement prohibiting unapproved “future” rates in the Indirect Costs section.

Exemptions to ASU’s escalation policy are permissible in cases where sponsors have published restrictions. RAs are advised to reference, upload or link this documentation when forwarding proposals for PNT Review. If a sponsor does not have a written policy and has indicated an escalation limitation, contact your assigned PNT GCO for guidance.


  • NICRA: Negotiated Indirect Cost Rate Agreement
  • NASA: National Aeronautics and Space Administration
  • PNT: Proposal & Negotiation Team
  • GCO: Grant & Contract Officer