Appendix 13 Indirect cost reimburse letter 508c

United States Department of Agriculture

Prospectus for Campground and Related Granger-Thye Concessions Chequamegon-Nicolet National Forest

Appendix 13: Indirect Cost Reimbursement Letter

Appendix 13: Indirect Cost Reimbursement Letter
United States
Department of
Agriculture
File Code:
Route To:
Subject:
To:

Forest
Service

Washington Office

2720/6500

14th & Independence SW
P.O. Box 96090
Washington, DC 20090-6090
Date: July 11, 2002

Indirect Cost Reimbursement in Granger-Thye Permits
Regional Foresters

Issue. At the request of the National Forest Recreation Association (NFRA) we have evaluated how the Forest Service reimburses the indirect costs of permit holders who perform GrangerThye (GT) fee offset work. Holders are concerned that forests are inconsistent on whether and how indirect costs are allowed and what documentation is necessary to support a claim for indirect costs.
Background. Under Section 7 of the GT Act, and when authorized by a permit and GT fee offset agreement (GT agreement), the Forest Service offsets all or part of the permit fee paid by campground concessionaires with the cost of Government renovation, reconditioning, improvement, and maintenance performed at the concessionaire’s expense on facilities covered by the permit. When the holder performs the work, it is authorized by an attachment to the permit called a GT fee offset agreement. Alternatively, the Forest Service may enter into a collection agreement as authorized by Section 5 of the GT Act to perform work eligible for fee offset under Section 7.
Historical Practice. Typically the field has offset the holder’s direct costs for approved offset work, but reimbursement for the holder’s indirect costs has varied. Approaches have included limiting indirect costs to a maximum of 5 percent or 10 percent of the fee to be offset, limiting the type of indirect costs to be reimbursed, or reimbursement of a flat overhead rate without documentation. Review of this issue has shown that these methods are not appropriate, because holders should be reimbursed actual costs. There is a misconception among employees and holders that the Forest Service can reimburse a flat indirect cost rate without documentation. There is often disagreement between forests and holders about what costs may be reimbursed. Comparison. The Office of Management and Budget (OMB) has issued circulars to guide cost reimbursement for several types of business entities, including Circular A-87 for State and Local