What is the difference between a provisional and actual indirect rate?
A provisional rate is a temporary rate that allows you to be reimbursed by the government based on a multiplier of a direct cost or costs depending on your indirect rate structure. However, for flexibly-priced contracts (such as cost-plus-fixed-fee contracts – CPFF), you need to file an actual rate proposal within six-months of your year-end to “settle up” between your provisional and actual indirect rates. Any financial requirements occur after the award has completed its period of performance and the actual indirect rates for the years included in the period of performance have been audited. If you are owed money, the government will reimburse you any amounts owed up to the award amount. If you owe the government funding, you would need to write a check for the excess.
Related Questions
- If a commercial organizations provisional indirect cost rate has recently expired, what rate should be used for funding a new NIH award?
- How many days do I have to submit a provisional (based on budgetary information) indirect cost rate proposal 1st time?
- What is the difference between a provisional and actual indirect rate?
