Document background
The Indirect Cost Agreement is a crucial document used in Canadian business and research environments where one party incurs indirect costs in supporting activities for another party. This agreement is particularly common in research institutions, universities, and government-funded projects where overhead costs need to be properly allocated and recovered. The document establishes the methodology for calculating indirect costs, sets out reporting and compliance requirements, and ensures alignment with Canadian federal and provincial regulations. It becomes necessary when there is a need to formalize the recovery of indirect costs such as facilities, administration, utilities, and other overhead expenses that cannot be directly attributed to specific projects. The agreement typically includes detailed schedules for cost calculation methods, reporting templates, and compliance requirements, making it essential for organizations dealing with complex cost allocation scenarios in Canada.
