Optimizing Lab Space Use Can Significantly Reduce Overhead Costs for Research

Recent policy changes initiated at the National Institutes of Health (NIH) have put a spotlight on the overhead charges associated with conducting research and operating scientific and academic institutions. Whether research funding is limited or the process for allowable overhead costs restructured, evaluating lab space is one way to ensure institutions operate efficiently and optimize the lab space available for science. This has been an important focus area of the Bringing Efficiency to Research Grants (BETR Grants) effort for the I2SL University Alliance Group (UAG).  University of Colorado (CU) Boulder Green Labs Program Manager and UAG Chair Kathryn Ramirez-Aguilar spoke about these important efficiency opportunities—and the need for research funders to address them—during I2SL’s virtual Education Week April 7.

“Efficient use of lab space results in more productive research and avoids the additional costs and emissions associated with new laboratory construction,” Kathy noted.

The amount of space in research buildings connected to sponsor-funded research (or grants) is a key factor in determining a U.S. research institution’s overhead or Indirect Cost Recovery (ICR) rate. Kathy explained that the U.S. federal ICR rate calculation process contains no factors or requests for efficient use of research space, energy, or water. “The rate is calculated from previous overhead cost data, and as a result, costly inefficiency within facilities such as space utilization can lead to a higher rate,” Kathy said. “One could think of the process as a reimbursement, there is no reward in the current system for efficient use of space and no penalty for inefficient use of space.”

Kathy’s presentation pointed out that U.S. institutions only receive funding for overhead costs if a grant is awarded, creating reliance on researchers to propose ideas to win grants and continue the flow of overhead (ICR) funding to research institutions. This reliance can make it difficult for administrators to set up a process to take away underutilized space from faculty. However, Kathy also noted that inefficient use of space can lead to a loss of overhead (ICR) dollars for a campus, since less productive research or lab spaces would result in fewer grants.

Kathy challenged Education Week attendees to change the culture among research institutions—starting with buy-in from campus leadership—to reduce inefficient use of lab space. In connection with campus goals for climate action and financial resiliency, institutional leadership could give the charge to implement a process to periodically assess and reallocate lab space. The CU Anschutz Medical School spoke during the 2024 I2SL Education Week about their initial 2021 lab clean-up project, which also evaluated the use of about 550,000 square feet (SF) of lab space. Teams of scientists, facilities staff, environmental health and safety officials, and the Dean’s Office Leadership and Research Affairs identified 44,000 SF of underutilized lab space being used as storage and cleaned up that space for newly hired faculty, avoiding the need to construct new lab space. You can find a link to their talk on the I2SL LabSavers web page.

During her 2025 Education Week presentation, Kathy also encouraged institutions to emphasize equipment sharing in university start-up packages and offer letter language.  At CU Boulder, a case study of 16 research groups sharing resources in a shared cell culture facility reduced lab space requirements by 30 percent and avoided $253,000 in annual costs compared to each research group having their own equipment.

Because space surveys need to be conducted for the U.S. federal ICR rate calculation for research institutions, Kathy said the survey is an opportunity for institutions to improve space evaluation processes and add metrics to the space survey that could be beneficial for future institutional efforts for research space optimization. Additionally, if the current federal ICR process were to encourage and reward space optimization, this could be accomplished by giving more weight in the space surveys for actions taken to improve the efficient use of lab space such as renovation over new construction and shared equipment spaces.

I2SL offers the free LabSavers campaign with tools to conduct and promote lab clean-outs and space evaluations. CU Boulder Green Labs is conducting a pilot Lab Clean-up project in collaboration with EH&S, multiple departments, and building managers in May and June to help labs by streamlining the process of purging items they no longer need in lab. The university’s Green Labs Program has also placed posters across the campus to promote space sharing and efficiency, which are available to view on the Circular Economy for Labs Community of Practice website in the University Alliance Group section.