In 1998, Congress directed the White House Office of Science and Technology Policy (OSTP) to conduct an analysis of issues related to the ways universities recover the facilities and administrative costs (also known as indirect costs) they incur when performing research under federal grants and contracts. At OSTP's request, the RAND Science and Technology Policy Institute prepared this report to present information on facilities and administrative costs in U.S. higher education. The report, which may be of interest to scientists, higher education administrators, and federal, state, and local governments, addresses the issues raised by Congress. It presents factual information and analysis of alternatives rather than taking positions on policy options. (Contains 51 references.) (EV)