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    Field (Indirect) Overhead and G&A Overhead %

    Hi. I need help understanding the how I come up with a government project's overhead % as a contractor.

    I have determined what the direct costs, indirect costs (field office) and G&A overhead costs are.

    1. How do I calculate these costs to arrive at the total overhead % that I will use to allocate the 'overhead' costs to the job?

    2. What does the following mean exactly? "How you divide it is how you apply it."

    Please help. Thank you.

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    Solution Preview

    Hi. I need help understanding the how to assess a government project's overhead % as a contractor.

    When assessing a government project's overhead percentage as a contractor, the contractor should account for how the level of competition that exists for the project, and ensure that they are as competitive as possible. To ensure that this occurs, the contractor must first obtain the pricing history of the government agency or entity to deduce what previous contractors charged the government agency. This can be achieved by contacting any Procurement Technical Assistance Center or requesting the actual Point of Contact that is identified within any government contract.

    The contractor should also focus upon any special requirements that will be required within the government contract wherein these could heavily impact overhead costs for the contractor. In addition, quality requirements will also impact overhead costs for the contractor. The rule that has generally governed contractors in an informal manner is that costs will ultimately be 3-5% higher than the value for the government contract to your business, which requires the contractor to ...

    Solution Summary

    The expert calculates the overhead and questions.