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Accounting for Government Contracts – Fringe, Overhead and G&A

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If you’re planning to have the U.S. Authorities as a consumer, you’ll need to have your accounting programs arrange so you may deal with their accounting necessities. No matter whether or not you’re partaking in a plain vanilla contract or an SBIR grant, you can be required to barter fringe profit charges, overhead charges, and basic and administrative charges.

Fringe advantages charges embody

  • Compensated Absences, akin to Trip, Holidays, and Sick Depart;
  • Medical Packages, akin to Well being and Dental Insurance coverage;
  • Retirement, such because the Outlined Contribution Portion of your Retirement Plan and Plan Service Charges;
  • Lengthy-term Incapacity Protection;
  • Employee’s Compensation Protection; and
  • Worker Wellness, akin to Health Membership Membership and Different Wellness Packages

Overhead covers direct and oblique assist of the workers whose time is being billed to the Authorities. This consists of objects like

  • Lease (just for the house that these staff use);
  • Depreciation of their furnishings and tools;
  • Utilities (primarily based on the house allotment for these staff); and
  • Provides that these staff share, akin to workplace provides.

Normal and administration covers different prices which can be crucial for the corporate to carry out on this contract, together with:

  • Administration (and their related fringe, direct, and oblique prices)
  • Authorized prices
  • State and Federal taxes
  • Advertising and marketing to the Authorities prices
  • Accounting

Notice, nevertheless, that they’ve intensive laws masking was is just not thought of an allowable price (see the FAR part 31.205 – Chosen Prices [http://farsite.hill.af.mil/reghtml/regs/far2afmcfars/fardfars/far/31.htm#P268_51249] to get a selected description as to what’s allowable and what’s not.

Upon getting negotiated these charges, you can be required to again them up yearly utilizing an oblique price mannequin to point out that you’re matching your negotiated charges. This mannequin is topic to audit.

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Though you may work out what wants to enter these calculations, it’ll take a very long time to learn all of the laws. If you happen to consider that you simply need to win Authorities contracts, you need to assume forward or rent a advisor to help you with the method.

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