Indirect Costs in Federal Grants, Cooperative Agreements, and Contracts

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Indirect Costsin Federal Grants, Cooperative
Agreements, and Contracts

• Presented by Victor M. Lopez
• Chief, Division of Cost Determination BOC/OASAM

April 24, 2008
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Topics to be covered during this short
presentation

• Division of Cost Determination (DCD) Details
  and contact info.
• Website address for DCD, including indirect cost
  proposal guidelines.
• Composition of Total Costs.
• Who reviews/approves Direct and Indirect costs?
• When should organizations submit Indirect Cost
  Rate Proposals?
• Which organizations should submit Indirect Cost
  Rate Proposals?
• During grant application, what will DOL require
  organizations to indicate regarding Indirect
  Costs?
• Details for Option A, B, and C.

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Division of Cost Determination, OAMS, USDOL 200
Constitution Ave., N.W. S-1510 Washington, D.C.
20210 [phone]   Our office has been in
existence since 1972. We are primarily
responsible for reviewing, negotiating, and
approving indirect cost rates and cost allocation
plans for entities receiving Federal funds
primarily from the U.S. Department of Labor, on
behalf of the Federal Government. We also
perform cost analysis on pre-award reviews, and
audit resolution. Our reviews are based on the
following cost principles
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(No Transcript)
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Indirect Cost Guide BookInternet Address
http//www.dol.gov/oasam/programs/boc/costdetermin
ationguide/main.htm
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Composition of Total Costs

• Direct Costs
• Plus
• Indirect Costs
• Less
• Applicable Credits

Re FAR Part 31.201-1
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Who reviews and approves Direct Costs?

• Direct Costs are reviewed and approved by the
  program offices sponsoring the award.

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Who reviews and approves Indirect Costs?

• Indirect Costs are reviewed and approved by the
  organizations Federal Cognizant Agency (FCA -
  agency providing the preponderance of direct
  Federal funds to the organization. The
  organization provides a proposal with supporting
  documentation to negotiate a rate.

Note Allocated indirect costs to the grant
(based on FCA approval) are subject to
administrative limitations, ceilings, caps, etc.
established by the grant officer or program
sponsoring award.
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When organizations should submit Indirect Cost
Rate Proposals to the FCA?

• Proposals must be submitted annually
• No later than six (6) months after the end of the
  organizations fiscal year.
• New grantees/contractors must submit a proposal
  within three months (90 days) after the effective
  date of the award.
• Extensions of time may be granted.

Re FAR Part 52.216-7(d)
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Which Organizations should submit Indirect Cost
Rate Proposals to the FCA?

• Those organizations receiving direct Federal
  funds.
• Organizations that are part of an Association
  (Lead Grantees, as well as Associates).

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During grant application, what DOL will require
the organization(s) to indicate regarding
Indirect Costs?

• Fill out an Indirect Cost Form, indicating
• whether it has a current Negotiated Indirect Cost
  Rate Agrement (NICRA) approved by the FCA,
  validating the allocable indirect costs to be
  billed to the grant.
• whether it needs to be updated, or no indirect
  cost rates have been ever approved by an FCA.
• whether no indirect costs will be claimed.

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Regarding Option A Current NICRA submitted

• Note Future NICRAs, showing provisional/final
  rates for each applicable fiscal year during
  grant period, must be submitted to the Grant
  Officer and/or GOTR for the entire agreement
  period.
• Some Federal agencies issue NICRAs that are
  effective until amended. These NICRAs will not
  be accepted by the GO if the last negotiated FY
  shown in the agreement is more than one year past
  the date of the USDOL award.

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Regarding Option B No NICRA updated or ever
approved

• Note A Temporary Billing Rate, not exceeding
  90 days, may be negotiated by the Grant Officer
  to allow limited reimbursement. Future billings
  of indirect costs, however, should be based on
  approved NICRAs.
• Within this 90-day period, organizations who
  received the award must submit an acceptable
  indirect cost proposal to their FCA to obtain a
  provisional indirect rate.
• Failure to submit an indirect cost proposal
  within this 90-day period means that the
  organization shall not receive further (if
  applicable) reimbursement for indirect costs.

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Regarding Option C No Indirect Costs Claimed

• Per the cost principles, cost may not be shifted
  between direct and indirect costs to overcome
  funding deficiencies.
• The organization will be required to certify that
  the costs billed are direct costs by filling out
  a form.

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Questions?
Contact Information Victor M. Lopez Lopez.victor_at_
dol.gov 202-693-4106