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November 5, 2008    DOL Home > OASAM > Business Operations Center   

Division of Cost Determination — Business Operations Center

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Indirect Cost Proposal Guidelines

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The Division of Cost Determination (DCD), currently within the Office of Acquisition Management Services, has been in existence since 1972. It is a centralized office with the authority to administer the:

  • Office of Management and Budget (OMB) cost principles (A-87 — State and local organizations; A-122 — non-profit organizations) and
  • Federal Acquisition Regulations, for contractors.

Within this authority, DCD has been designated by OMB as the cognizant agency for the Department of Labor (DOL). Through this designation, DCD is responsible for negotiating indirect, fringe benefit (and other specialty) rates and issuing related Rate Agreements for a significant number of organizations receiving the preponderance of Federal funds from DOL.

DCD performs four main functions:

  1. Negotiate and maintain a file of indirect cost rates and cost allocation plans for the organizations that receive the preponderance of funds from DOL.
  2. Provide cost analysis through Field Pricing Reports (based on FAR 15.404-2) to Contracting Offices in DOL.
  3. Conduct the Audit Resolution process (based on OMB Circular A-50) for indirect costs and cost allocation findings resulting from audit reports issued by DOL's Office of the Inspector General (OIG).
  4. Provide liaison, coordination, and technical assistance to federal agencies, DOL personnel, grantees, and contractors on indirect cost issues through formal and informal communication.

For any questions, see our detailed office directory listing below (Appendix III). You may also contact the DCD National Office in Washington, D.C. at (202) 693-4100.

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Table of Contents — Guidelines updated in October 2007

Guidelines for Indirect Cost Rate Determination — Entire Guide (PDF; 1,486K)

SECTION I: General Information (PDF; 54KB)

SECTION II: Guidelines for Preparing Indirect Cost Proposal (PDF; 100KB)

SECTION III: Sample Exhibits for Indirect Cost Proposal (PDF; 281KB)

Includes samples for "Certificate of Indirect Costs" and "Cost Policy Statement."

SECTION IV: Common Indirect Cost Problems (PDF; 43KB)

SECTION V: Questions and Answers (PDF; 50KB)

APPENDIX I: Sample Indirect Cost Rate Agreement — Commercial (PDF; 39KB)

APPENDIX II: Sample Indirect Cost Rate Agreement — Non-profit (PDF; 39KB)

APPENDIX III: DCD Address Listing (PDF; 42KB)

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Guidance for State/Local Governments

Based on the cost principles established in OMB Circular A-87, State and local organizations may support the indirect costs that they incurred by submitting an Indirect Cost Rate (ICR) proposal or a Cost Allocation Plan (CAP) to their Federal cognizant agency. The proposals should be submitted no later than six months after the end of the entities fiscal year. If DOL provides the preponderance of funds to the organization, DOL would normally be cognizant. The Division of Cost Determination is responsible for the review and approval of the proposals submitted to DOL.

The proposals must be supported using the documentation cited below (as appropriate). Sample exhibits, for requested workpapers, Cost Policy Statement, and Certificate of Indirect Costs (CAP uses the same format) are available for the ICR. Also available are sample documents for the Cost Policy Statement and the Certificate of Indirect Costs. In addition, there is a link for the HHS ASMB C-10 — implementation guide for OMB Circular A-87, as well as a link for A-87 cost principles.

State Workforce Agencies (SWAs) — Checklists

  1. ICR (PDF)
  2. CAP (PDF)
  3. CAP using FARS (PDF)
  4. CAP using ETA Handbook No. 362 (PDF)

All State/Local Governments organizations except SWAs — Checklists

  1. ICR (PDF)
  2. CAP (PDF)

Sample Exhibits to support an ICR (PDF)

Cost Policy Statement (PDF) (applicable to all State/Local governments)

Certificate of Indirect Costs (PDF) (applicable to all State/Local governments)

HHS — Implementation Guide — Circular A-87 (PDF)

OMB Circular A-87 — Cost Principles for State/Local Governments

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