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Yes, we went through this some years ago (established a NICRA with our cognizant agency). A few things that helped:
- Confirm your cognizant agency first: for most nonprofits it’s HHS (Division of Cost Allocation) or your largest federal funder if HHS isn’t it. This determines who you’re actually negotiating with.
- 2 CFR 200 Appendix IV is your bible for allowable methodology. Read it before you draft anything.
- Decide between a provisional/final rate vs. the 10% de minimis: if your indirect costs are much higher than 10%, it’s worth the lift; if you’re borderline, de minimis may not be worth the paperwork.
- You’ll need a solid cost allocation plan and a clean base. Get your base definition right early; it drives everything downstream.
- HHS has a decent indirect cost rate proposal checklist and sample formats on the DCA website; use their template rather than building from scratch.
- Budget for it taking 3–6 months minimum from submission to negotiated agreement, sometimes longer if there’s back-and-forth.
- If you have the budget, a consultant who’s done NICRA negotiations before can save you multiple rounds of revisions. HHS reviewers are picky about base/pool consistency.
Happy to share the checklist we used if that would help
