When you elect to apply the 10% de minimus rate rather than develop an indirect cost rate proposal, you are not required to submit a proposal for approval. There are, though, some assumptions about this that you need to know.
The regulations around this state that, for the 10%, the “cost pool and base for distribution” for the indirect cost is divided by modified total direct costs.
So what are these modified direct costs? From Uniform Guidance:
Modified total direct costs, consisting all direct salaries and wages, applicable fringe benefits, materials and supplies, services, travel and up to the first $25,000 of each subaward (regardless of the period of performance of the subawards under the award). Modified total direct costs what exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each subaward in excess of $25,000. Other items may only be excluded when necessary to avoid a serious inequity in the distributions of indirect costs, and with the approval of the cognizant agency for indirect costs.
Some centers chose the 10% because they didn’t feel comfortable with the more complex proposals, policies and application of an indirect cost rate. Hopefully if you chose the 10%, you understand that this has a specific method for applying that 10% in keeping with these requirements