Resources for Implementing Partners

NEGOTIATED INDIRECT COST RATE AGREEMENT(NICRA)

What is NICRA?

A document published to reflect an estimate of indirect cost rate negotiated between the Federal Government and a Grantee/Contractor’s organization which reflects the indirect costs (facilities and administrative costs) & fringe benefit expenses incurred by the organization that will be the same across all the agencies of the United States.

When is NICRA applied?

• When a Grantee/Contractor has indirect costs already negotiated with the USG.  As it is difficult for a Federal agency to determine the indirect costs associated with conducting a program or project.

• The NICRA allows the Grants or Contracting officer to quickly calculate the appropriate allocation of indirect costs associated with any one project and this stream-lines the entire process.

AUTHORITY

Office of Management and Budget (OMB) Circular A - 122 Section E “Negotiation and Approval of Indirect Cost Rates”.

NICRA Designations

NICRA DESIGNATION – Provisional

DESCRIPTION - A provisional rate is a temporary rate established for a given period of time to permit funding, claiming, and reporting of indirect costs pending establishment of a permanent rate for that period.

RENEWAL - Upon completion of the Grant/Contract period

NICRA DESIGNATION – Predetermined

DESCRIPTION - A predetermined rate is a permanent rate established for a specific future period based on a review of actual costs from a preceding period. These rates are not subject to adjustment except under very unusual circumstances.

RENEWAL - Two to five years

NICRA DESIGNATION – Fixed

DESCRIPTION - A fixed rate has the same characteristics as a predetermined rate; however, the difference between the costs used to establish the fixed rate and the actual costs incurred during the fiscal year covered by the fixed rate is classified as a carry-forward. The carry foward is used as an adjustment to the current rate to allow the Grantee/Contractor to either recover under recovery or pay back an over recovery in a subsequent year.

RENEWAL - Two years, then annually thereafter

NICRA DESIGNATION – Final

DESCRIPTION - A final rate is a permanent rate established after an organization’s actual costs for a current year are known. A final rate is used to adjust indirect costs claimed based on a provisional rate.

RENEWAL - Typically annually

LEARN MORE

Link for more information on NICRA -

https://www.usaid.gov/data/dataset/21ecfb30-d6a2-4072-acdf-86f5abfeeea5

Link for a Guide for Indirect Cost Determination -

https://www.dol.gov/oasam/boc/dcd/DCD-2-CFR-Guide.pdf

Should you have any questions or clarification regarding the content of this Infographic, please contact indiarco@usaid.gov