Higher margins and improved profitability directly result from the proper calculation of indirect rates and the maximum recovery of all costs incurred. Classification of costs, the identification of correct and allowable allocation methods, and accurate mathematical formulas are critical in properly calculating indirect rates.

Companies call for help because they’re losing money or competitiveness in their prices – both resulting from issues with their indirect rates. We often find clients working with old indirect rate structures, outdated calculations, or reports with embedded errors. The typical issues we find with government contract indirect rate calculations are:

  • Improper composition of the pool – incorrect or missing GL accounts and dollars; non-homogenous accounts or pools.
  • Improper composition of the base – incorrect or missing GL accounts and dollars; incorrect treatment of unallowable costs.
  • Unacceptable or incorrect allocation method – companies try to allocate one portion of the pool one way and the remaining portion another way. This is never justifiable or equitable.
  • Failure to properly flow allocated amounts among the pools.
  • Incorrect treatment of unallowable costs.
  • Errors with B&P or IRAD costs in the G&A pool.
  • Failure to include the MSOH pool in the base of G&A.
  • Mathematical errors.

We’ll calculate your indirect rates using our template and provide you with a copy of all Excel files for your records. This engagement includes:

  • 60-minute project kick-off
  • Indirect rate calculation
  • 60-minute review of results and recommendations

Indirect rate calculations involve the calculation of indirect rates using our proprietary template. Packages include one 60-minute presentation of final rates and delivery of all files in Excel format. The client must provide trial balance or budget data by account in CSV or Excel format.

Why Left Brain Professionals

We know government contract accounting. More importantly, we know how to properly calculate indirect rates and the effect those have on achieving total cost recovery and maximizing profitability. Our goal is to improve your bottom line.

Plans & Pricing

Standard Intermediate Advanced
# of Pools Up to 3 Up to 5 Up to 7
Fee $2,500 year 1
$1,500 each additional
$3,500 year 1
$2,500 each additional
$4,500 year 1
$3,000 each additional

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