There have been several conference calls among DoD U.S. Army Medical Research Acquisition Activity (USAMRAA) and NAVREF representatives in an ongoing effort to ensure smooth handling of the CDMRP PTSD/TBI awards. As those of you who are receiving these awards are aware, DoD has its own policies and procedures and these are often different from those of other granting agencies. Please make note of the following:

NPCs that do not already have federally negotiated indirect cost rates should provide USAMRAA contract specialists with a sound basis for their proposed rate. This should be a rate developed using actual and anticipated costs, not IRS Form 990. A rate calculated on the basis of the expenses reported in Part II of the NPC’s last completed IRS Form 990 is likely to be low and may result in the NPC not recovering all of its allowable costs. Additionally, a survey of other NPC rates or the administrative overhead rate charged on private sector funds is not an appropriate basis for a federal rate.

USAMRAA contract specialists are being advised to accept proposals for provisional rates on the basis of OMB Circular A-122. It is our understanding that in the past some may have been accepting only 990s and declining to accept proposals. If that is the case for your NPC, we very strongly recommend your working with an experienced consultant to develop a proposal for a provisional rate and re-submitting a proposal using real costs rather than the 990 as the basis for the NPC’s rate. Needless to say, time is of the essence.

As noted previously, Dave Vedder (dpvedder@comcast.net) is available for hire to assist NPCs in preparing proposals for provisional rates. Also, Robert (Bob) Forrester (rforr1@comcast.net) has been highly recommended by some of your NAVREF colleagues and welcomes the opportunity to work with NPCs. Acceptance of a low indirect cost rate could cause an NPC a severe cash flow problem as it administers the grants; please engage expert assistance on this very important aspect of administering federal awards.

CDMRP contract specialists may ask NPCs for a copy of their most recent financial audit.  The purpose is to verify that the NPC has undergone the appropriate type of audit (GAAS, GAGAS or OMB Circular A-133) and that there were no significant adverse findings.  We are in agreement with CDMRP that the numbers in the audit will not be used as the basis for a provisional indirect cost rate.