Many USAID partners do not realize that they can get reimbursed for indirect costs associated with their awards. The U.S. Government uses the Negotiated Indirect Cost Rate Agreement (NICRA) to reimburse expenses that cannot be clearly identified under a contract or grant—office space rental, utilities, and clerical and managerial staff salaries, for example.
“NICRA can really help nascent organizations working with the Agency to become financially stable,” said Brandon Sitzmann, director of the Partnerships Incubator’s Partner and Agency Readiness unit. “Without taking advantage of it, some of these organizations hamstring themselves. Every partner should find out more about NICRA.”
The amount of your reimbursements will depend on federally approved cost rates and your supporting documentation. Your Agreement Officer’s Representative (AOR) or Contracting Officer’s Representative (COR) can calculate your NICRA with you.
There are four types of NICRA rates:
- A provisional rate is a temporary rate that permits funding of indirect costs during a specific time period before a permanent rate is established.
- A predetermined rate is a permanent rate established for a specific period and is based on costs from a preceding period. These rates are usually not subject to adjustment.
- A fixed rate is classified as a carry-forward and is used as an adjustment to a current rate to allow you to either recover or pay back costs in a subsequent year.
- A final rate is a permanent rate established after an organization’s actual costs for a current year are known. It is used to adjust indirect costs claimed based on a provisional rate.
“So much of what we do at the Incubator is raising awareness of benefits like NICRA,” said Giorgi Baghishvili, the New Partnerships Initiative’s finance and operations manager. “Overhead is a big deal for our partners, and having NICRA in place in advance can help them dramatically.”
“Negotiated Indirect Cost Rate Agreement” (PDF)
“A Guide for Indirect Cost Determination” (PDF)