An indirect cost rate is a tool for determining the proportion of indirect costs each program should bear. It is the ratio (expressed as a percentage) of the indirect costs to a direct cost base. Organizations who wish to request indirect costs, that already have a negotiated rate with a federal cognizant agency, must use that negotiated rate in the grant application request, if indirect costs are requested. If the negotiated rate is expired, the applicant can apply for a one-time extension of up to four years without further negotiation. Application for an extension has to be made through the cognizant federal agency that initially negotiated the indirect cost rate. Non-federal organizations that have never had a negotiated indirect cost rate, and governmental departments or agencies that receive less than $35 million in direct federal funding per year and do not have a negotiated rate, may use the 10% de minimis indirect cost rate based on the organization’s modified total direct costs (MTDC).