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Applying for an indirect cost rate (ICR) for federal awards
Hello,
Has anyone been through the process (recently) of applying for a federal indirect cost rate? We are looking to apply in the near future and I’m looking for tools, advice, or helpful tips. Thanks in advance!
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7 Replies
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Hi Crystal – I encourage those in our community with direct experiences with calculating and negotiating ICRs to share their thoughts and input here. But in the interim, the National Council of Nonprofits has some helpful tips https://www.councilofnonprofits.org/articles/consider-adding-federally-negotiated-indirect-cost-rate-your-revenue-portfolio?gad_source=1&gclid=CjwKCAjwgfm3BhBeEiwAFfxrG7YWyOKrP6_rjNPSf7kPP3CCqKXj6usKEgmwKRBUCbnR5YzcpD5GOBoC3tAQAvD_BwE
councilofnonprofits.org
Consider adding a federally negotiated indirect cost rate to your revenue portfolio
You may want to consider adding a federally negotiated indirect cost rate agreement (NICRA) to your revenue portfolio, because it can add more resources.
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Hi Crystal.
We are going through that process right now.
I can answer any questions you may have.
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Hi Huong,
How is it going with IDC negotiations? I am having difficulty in how to start and whom to reach out to.
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Negotiating a rate like this is a big pain. As of this month, the de minimus rate was increased to 15% from 10%. You might want to consider just taking this default rate. The time saved is worth considering.
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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
