Course Summary
Credit Type:
Organization's ID:
CMC 2320V
5 days
Dates Offered:
Credit Recommendation & Competencies
Level Credits (SH) Subject
Lower-Division Baccalaureate 3 Contract Management


Establishing Final Indirect Cost Rates course provides foundational knowledge of indirect cost. Students will engage in critical thinking, discussion, and practice exercises to refine their skills in understanding and settling Final Indirect Cost Rates.

Learning Outcomes:

  • Recall core knowledge associated with establishing Final Indirect Cost Rates.
  • Explain the Administrative Contracting Officer's (ACO's) responsibility in determining the adequacies of a contractor's Final Indirect Cost Rates Proposal (FICPR) and of a given Contractor Incurred Cost Proposal.
  • Explain the circumstances that may trigger a change from Audit Determined to Contracting Officer Determined FICR.
  • Recognize situations in which a Low-Risk Memo may be used.
  • Given an audit report, review to identify items that might impact the negotiation position of the Pre-Negotiation Objective Memorandum (PNOM).
  • Develop relevant sections of a Pre-Negotiation Objective Memorandum using a template.
  • Describe the key actions for Post Negotiation and Settlement required to establish Final Indirect Cost Rates (FICRs).
  • Describe the documentation requirements for each step of the FICR settlement process, including file retention.
  • Explain the FICR unique topics and their impact on the ACO’s responsibilities in establishing Final Indirect Cost Rates.
  • Identify the circumstances under which Penalties with associated Interest are to be applied.
  • Explain the impact of the Statute of Limitations.
  • Describe the impact of Direct Costs upon the determination of Final Indirect Cost Rates.

General Topics:

  • Final Indirect Cost Rates (FICR)
  • Policies and procedures / Authority structures
  • Administrative Contracting Officer/Contract Price/Cost Analyst responsibilities
  • Final Indirect Cost Rates Proposal (FICPR) requirements / adequacy
  • Defense Contract Audit Agency (DCAA) auditor rate determination to include Risk-Based Sampling
  • DCAA Audit and Contractor Proposal Analyses
  • Pre-Negotiation Objective Memorandum (PNOM)
  • Negotiation, Price Negotiation Memorandum (PNM), and Settlement
  • Quick Closeout, Penalties, Statute of Limitations, Contracting Officer’s Final Decision (COFD), and settling direct costs
Instruction & Assessment

Instructional Strategies:

  • Case Studies
  • Classroom Exercise
  • Discussion
  • Learner Presentations
  • Lectures
  • Practical Exercises

Methods of Assessment:

  • Case Studies
  • Examinations
  • Performance Rubrics (Checklists)

Minimum Passing Score:

Supplemental Materials