Streamlining USAID’s Provisional NICRA Process

The US Agency for International Development (USAID) recently revised the process for submitting provisional Negotiated Indirect Cost Rate Agreements (NICRAs). Cost and Audit Support (CAS) Division Chief Stephanie Snyder shared these changes during USAID’s FY2024 third-quarter Business Forecast and Partner Update Webinar. Here is a breakdown of key updates and what they mean for implementing partners (IPs). 

Key Changes to the Provisional NICRA Process 

• Annual submission requirement: Provisional NICRAs must now be submitted annually. 

• Effective period-end date: Each provisional NICRA year-end date will be consistent with the cost accounting fiscal period. 

• Flexible effective period: IPs can choose the length of the effective period for their provisional NICRAs, ranging from one to five years. 

• Faster approval: USAID aims to approve provisional NICRAs within 30 to 45 days after submission. 

Submission Requirements 

To ensure the use of current and accurate indirect rates, USAID now requires that provisional NICRAs be submitted at least three months before the start of the new fiscal year. The following need to be included in the submission: 

• Contact information: Update any changes to the point of contact or organization’s address. 

• Accounting changes: Describe any changes impacting the new fiscal year. 

• Indirect cost rate calculation: Provide a detailed calculation based on the most current financial data. 

• Unallowable costs: Ensure unallowable costs are excluded from projected indirect cost rate(s). 

• Award information: List all USAID prime awards covered under the new fiscal year. 

• Prime USAID award copy: Include a signed copy of the prime USAID award with the longest period of performance. 

Effective Period-End Date 

All provisional NICRAs must now identify an effective period-end date, eliminating the previous “Until Amended” status. This change requires timely annual submissions of new provisional indirect cost rate proposals. If a NICRA does not cover the period of performance of a new award, IPs will need to negotiate with the award Agreements Officer or Contracting Officers, which may involve a cost analysis for the uncovered periods. 

Flexible Effective Period 

IPs can now choose the length of the effective period for their provisional NICRAs, from one to five years. To negotiate a multiyear provisional NICRA, IPs must provide an indirect cost rate proposal that estimates the provisional rates for each fiscal year. 

Handling Disputes 

If an awarding agency does not accept the proposed rates, the awarding agency AO/CO should be referred to the IP’s assigned CAS negotiator. Including the negotiator’s contact information in the cost proposal can facilitate direct communication and resolution of concerns. 

Conclusion 

These updates aim to streamline the provisional NICRA submission process and ensure the use of accurate and current indirect rates. For questions on the revised requirements, IPs can contact the CAS Division. 

How BRG Can Help 

Contractors must stay informed of changes in the regulatory environment to ensure continuous compliance and mitigate audit risk. BRG’s Government Contracts experts offer insights to navigate the complex federal regulatory landscape, including NICRAs. Our team can advise on indirect rate structures and calculations; perform compliance assessments, business system reviews, and mock audits; implement remediation activities; and guide contractors through the unique government contracting regulatory environment.