The direct costs of performing the research are usually well understood, but there are many other significant costs involved in research that are not immediately obvious, nor can they always be attributed to a specific research project. None the less they are real costs and are incurred by the University for all research activities. These additional, non project specific costs are known as, Indirect Costs.
The determination of whether a funding agreement is a "grant" or a "contract" relates to the nature of the work to be performed and the terms and conditions under which that work is performed (as opposed to the title of the agreement). No one factor determines a contract from a grant; rather, a number of characteristics are looked at to make the determination of whether the University considers the agreement to be a research grant or a research contract.