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FLGOVCON49- Indirect Rates for Cost Plus Contracting Part 2

In this episode Jenny Clark continues telling you about Indirect Rates for Cost Plus Contracting and gets into some more detail.

Cost Plus Formats & Indirect Rates

Cost Plus is a Contract Type/Billing Format

Cost Plus Format Provisional Billing Rates

Cost Plus Format with Actual Billing Rates

You Overbilled the Gov’t – WRITE A CHECK!

How to Avoid Writing the Gov’t a Check

  • Monitor your Indirect Rates Monthly
  • Carefully track estimates through the end of your Fiscal Year
  • You can adjust your provisional rates if needed
  • Increase your spending slightly as you approach the end of the year.

GovCon Indirect Rate Math

SIMPLIFIED Indirect Rate Calculation

GovCon Indirect Rate Calculations

  • Fringe
    • Fringe Pool Costs divided by Productive Labor Base
    • Fringe accts divided
      by Direct Labor, Overhead Labor, G&A Labor and B&P Labor
  • Overhead
    • Overhead Pool Costs divided by Direct Labor Base
  • G&A
    • G&A Pool Costs divided by Direct Costs plus Overhead
  • NOTE!
    • There are variations depending on company, strategy and business practice


To contact Jenny W Clark

CEO, Solvability, Inc

Phone 256-882-6276
Linkedin Solvabilityjwc
Twitter Solvabilityjwc


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