Ipa Agreement by gko95621

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									                                         May 10, 2004


FP

TO:            Officials-in-Charge of Headquarters Offices
               Directors, NASA Centers

FROM:          F/Assistant Administrator for Human Resources

SUBJECT:       Allocable, Allowable, and Reasonable Indirect Costs for
               Intergovernmental Personnel Act (IPA) Agreements


The IPA Mobility Program permits participating organizations to negotiate the percentage of
costs that each party will pay in funding an IPA assignment. Generally, costs that may be
paid by NASA include the salary and benefits of the IPA assignee and certain travel and
relocation expenses. NASA can pay all, some, or none of those costs.

Earlier guidance from the Office of Personnel Management (OPM) stated that agencies
should not authorize reimbursement for indirect or administrative costs associated with the
IPA assignment. Recent discussions with OPM disclosed that its guidance was not intended
to prohibit the reimbursement of an allocable share of contractor indirect costs provided such
allocation is consistent with the contractor's established cost accounting practices. OPM
intends to clarify the guidance to state that: (1) the statutory authority establishing the IPA
program does not specifically prohibit reimbursement of indirect costs, and (2) reimbursement
of such costs should be determined by the agency that enters into the agreement.

Due to the unique nature of IPA agreements, the proper indirect cost allocation normally
should be limited to a reduced allocation of General and Administrative costs that includes
only those functions or categories that provide benefit to IPA agreements. The proper
allocation of indirect cost associated with IPA agreements generally is lower than the indirect
cost rate negotiated for organizations— including those indirect costs that organizations apply
to support their employees working offsite. Therefore, it is critical that the cognizant Federal
agency for negotiation and administration of indirect cost rates have a written agreement that
specifies the proper allocation of indirect costs associated with IPA agreements.

It is the policy of some Federal agencies not to authorize the reimbursement of indirect costs
associated with IPA agreements unless there is a written agreement from the cognizant audit
official that specifies the proper allocation of indirect costs associated with IPA agreements.
NASA is adopting a more flexible approach. In executing an IPA agreement in which the
nonfederal organization requests reimbursement for indirect costs but the proper allocation
of indirect cost has not been verified by the cognizant audit official, NASA may permit a
provisional indirect cost rate of 6 percent in the IPA agreement. The provisional payment of
6 percent would be adjusted, if necessary, when the cognizant audit agency has a written
agreement specifying the proper allocation of indirect costs associated with IPA agreements.

As a result of the OPM clarification, NASA has developed the following three clauses
addressing the allowability of indirect costs associated with the IPA program. Each IPA
agreement should include the appropriate clause for the allocation of indirect costs.

       (1) Insert the following language when the organization does not request that indirect
       cost be included as part of an IPA agreement:

              No indirect cost for this IPA will be allowed because none have been proposed
              for this IPA.

       (2) Insert the following language when the organization requests indirect costs and the
       proper allocation of indirect cost associated with IPA agreements has been verified by
       the cognizant audit official:

              The rate of ___ percent as confirmed by the cognizant audit official will be
              allowed for this IPA.

       (3) Insert the following language when the organization requests indirect costs, but the
       proper allocation of indirect cost associated with IPA agreements has been not verified
       by the cognizant audit official:

              The (name of the organization) has proposed an indirect rate of ____
              percent, which has not been audited by the cognizant audit officials. In
              lieu of waiting until an audit of indirect cost specifically for the IPA,
              the Government will recognize a provisional rate of 6 percent. The
              (name of the organization) must notify their cognizant auditing official
              of the provisional rate, and request that they include a separate indirect
              rate to be used specifically for IPA’s as part of the next incurred cost
              review. The parties will equitably adjust the costs of this IPA based
              upon an audited indirect rate, which specifies the proper allocation of
              indirect costs associated with IPA agreements involving (name of the
              organization).

This guidance has been coordinated with the Office of the General Counsel and the Office of
Procurement. It is issued as interim guidance, effective upon issuance, and will be
coordinated through the formal NODIS process for incorporation into the appropriate NASA
Procedural Requirements document.




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If you have any questions, please contact Carolyn Davis of my staff at (202) 358-0046 or
cdavis@nasa.gov.


//signed//

Vicki A. Novak




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Officials-in-Charge of Headquarters Offices:
AD/Mr. Gregory
AD-2/Mr. Martin
AA/Mr. Schumacher
ADI/Mr. Jennings
ADT/Dr. Greenfield
AG/Mr. Ciganer
AL/Mr. Jezierski
AS/Dr. Grunsfeld
B/Ms. Brown
D/Mr. Bradley
E/Dr. Hayden-Watkins
F/Ms. Novak
G/Mr. Pastorek
H/Mr. Luedtke
I/Mr. O’Brien
K/Mr. Thomas
L/Mr. Forsgren
M/Mr. Readdy
N/Dr. Loston
O/Mr. Sutton
P/Mr. Mahone
Q/Mr. O’Connor
R/Dr. Lebacqz
S/Dr. Weiler
T/Adm. Steidle
U/Ms. Kicza
V/Ms. Dunnington
W/Mr. Cobb
X/Mr. Saleeba
Y/Dr. Asrar
Z/Dr. Williams

Directors, NASA Centers:
ARC/Mr. Hubbard
DFRC/Mr. Petersen
GRC/Dr. Earls
GSFC/Mr. Diaz
JPL/Dr. Elachi
JSC/Gen. Howell
KSC/Mr. Kennedy
LaRC/Gen. Bridges
MSFC/Mr. King
SSC/Adm. Donaldson




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cc:
Personnel Directors:
FM/Mr. Sullivan
FP/Ms. Peterson
FT/Ms. Acoveno
W/Ms. Gilmore
OCP/Mr. Jedrey
ARC/Ms. McCullough
DFRC/Ms. Boyd
GRC/Ms. Gordon
GSFC/Mr. Paprocki
JPL/Mr. Roessler
JSC/Ms. Saiz
KSC/Mr. Simpkins
LaRC/Mr. Meisel
MSFC/Mr. Hightower
SSC/Ms. Lovingood




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