# Presentation: 866543

## Indirect Costsin Federal Grants, Cooperative Agreements, and Contracts

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

- April 24, 2008

## 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.

## Division of Cost Determination, OAMS, USDOL

**Division of Cost Determination, OAMS, USDOL**
**200 Constitution Ave., N.W. S-1510**
**Washington, D.C.  20210**
**(202) 693-4100**
**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:**

## Slide 4

## Indirect Cost Guide BookInternet Address:

- _[http://www.dol.gov/oasam/programs/boc/costdeterminationguide/main.htm](http://www.dol.gov/oasam/programs/boc/costdeterminationguide/main.htm)_

## Composition of Total Costs

- Direct Costs
- Plus
- Indirect Costs
- Less
- Applicable Credits

**Re: FAR: Part 31.201-1**

## Who reviews and approves Direct Costs?

- _Direct Costs_ are reviewed and approved _by the program offices sponsoring the award_.

## Who reviews and approves Indirect Costs?

- _Indirect Costs_ are reviewed and approved by the organization’s 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.

## Proposals must be submitted annually
No later than six (6) months after the end of the organization’s 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.

- No later than _six_ (6) months after the end of the organization’s 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.

- When organizations should submit Indirect Cost Rate Proposals to the FCA?

***Re: FAR Part 52.216-7(d)**

## 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).

## 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.

## 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.

## 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.

## 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.

## Contact Information:

- _Contact Information_:
- Victor M. Lopez
- Lopez.victor@dol.gov
- 202-693-4106