Indirect Costs

Follow this process for the establishment of Indirect Cost rates prior to submission of an application:

GUIDANCE FOR APPLICANTS When NIFA is not the cognizant federal agency

Applicants may request full indirect costs, subject to statutory limitations.

In order to do so, the applicant must use the current negotiated indirect cost rate established by its cognizant federal agency (the agency that provides the most funds).  If awarded, the applicant will be required to produce a negotiated indirect cost rate agreement from the cognizant agency in order to recover indirect costs.  If unable to obtain a negotiated rate from its cognizant agency, the applicant is not permitted indirect cost reimbursement.  Rather, the applicant may only be reimbursed for allowable direct costs.  Violation of cost accounting principles is not permitted when re-budgeting or charging costs to awards.  Rather, costs must be consistently charged as either indirect or direct costs.  During the application process, the applicant may submit general questions to electronic@nifa.usda.gov.

GUIDANCE FOR APPLICANTS When NIFA is the cognizant federal agency

Applicants may request full indirect costs, subject to statutory limitations.

If the applicant wants full indirect costs, but does not have a negotiated rate, and NIFA is the cognizant agency, the applicant must calculate an indirect cost rate in order to request indirect costs.  Several sample indirect cost rate calculations are provided on NIFA’s indirect cost webpage located at: http://nifa.usda.gov/business/indirect_cost_process.html.  During the application process, the applicant is not required to complete the entire indirect cost package identified below.  Rather, the applicant need only calculate an indirect cost rate to serve as a basis for requesting indirect costs.  The applicant should identify the calculated percentage rate in the space allotted for item H of the budget sheet. The applicant should also identify the direct cost budget categories to which it applies the rate (i.e., the base) in the space allotted for item H of the budget sheet.  Applicants may request indirect costs using the lesser of: (a) the calculated rate; or (b) the maximum statutory rate stated in the Request for Application, if any.  During the application process, the applicant may submit general questions to electronic@nifa.usda.gov.

GUIDANCE FOR ALL APPLICANTS

Applicants may request a 10% de minimis indirect cost rate, subject to statutory limitations.

Applicants who cannot obtain a negotiated rate from their cognizant agency, or who do not wish to go through the negotiation process, may request a 10% de minimis rate if eligible.  Applicants who have never received a negotiated indirect cost rate agreement are eligible to request a 10% de minimis indirect cost rate.

The 10% de minimis rate should be applied to Modified Total Direct Costs (MTDC).  MTDC means all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award).  MTDC excludes equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000.  Violation of cost accounting principles is not permitted when charging costs to awards. Rather, costs must be consistently charged as either indirect or direct costs.  Additionally, once elected, the 10% de minimis rate must be applied to all existing awards.  If the cognizant agency issues a negotiated rate subsequent to award, the negotiated rate may not be retroactively applied.

Waived Indirect Costs.  An applicant may elect not to request recovery of indirect costs.  If so, the applicant should write “None Requested” in the space allotted for item H of the budget sheet.  During the application process, the applicant may submit general questions to electronic@nifa.usda.gov.

INDIRECT COST GUIDANCE FOR ALL ENTITIES

INDIRECT COST GUIDANCE FOR Nonprofit Organizations

INDIRECT COST GUIDANCE FOR Commercial, For-Profit Companies

GUIDANCE IF SELECTED FOR AWARD

If the application is selected for award.  If NIFA is the cognizant agency, and the grantee chooses to negotiate an indirect cost rate, NIFA will request the grantee’s ICP package and begin the negotiation process in order to establish a negotiated indirect cost rate. The grantee should submit a complete ICP package to RecipientsICPs@nifa.usda.gov. Note that NIFA may issue the award, but withhold funds budgeted for indirect costs pending completion of the indirect cost rate negotiation process.  Upon completion of the negotiation process, NIFA will notify the grantee if a modification to the grant budget is necessary.