Indirect Rate & Budgeting Support for GovCon Firms
Indirect rates for government contracts can feel like algebra written in FAR clauses. We turn that complexity into a clear roadmap—developing budgets, setting effective cost-control measures, and monitoring performance so every rate aligns with compliance and profitability goals.
Typical GovCon Cost-Pool Structure
List of Services
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Fringe PoolList Item 1
Payroll taxes, health insurance, paid leave. Allocated over direct and indirect labor hours to track the true cost of employment.
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Overhead PoolList Item 2
Project-level support such as program management, contract‐specific training, bid & proposal labor, and small tools. Applied to direct labor to capture day-to-day operating costs.
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General & Administrative (G&A) PoolList Item 3
Enterprise expenses: executive leadership, accounting, HR, IT infrastructure, legal, and business insurance. Distributed over a Total Cost Input base so corporate costs scale with revenue.
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Material Handling (MH) or Subcontract Admin (SCA) PoolList Item 4
Optional pools that recover the effort of procuring materials or managing subs. Used when those activities skew large enough to merit a distinct burden rate.
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Facilities Capital Cost of Money (FCCOM)
An imputed cost that lets capital-intensive contractors earn a return on facilities investment without inflating fees. Recognized separately from depreciation to stay FAR-compliant.
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A healthy cost-pool structure accomplishes three things:
- Recovers every allowable cost so cash flow stays positive— even on cost-plus work.
- Keeps bids agile by preventing overhead creep that prices you out of fixed-price competitions.
- Survives audits because each expense follows a documented allocation rule, briding FAR Part 31 and CAS thresholds with clear logic.
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Not sure your pools pass the test?
Request a Rate Review
Mastering Government Contract Budgeting
From forward-pricing rate proposals to provisional billing rate updates, our specialists track every deadline. We prepare data packs, brief your team, and defend assumptions—so auditors focus on numbers, not narratives.
Boost Your Competitive Edge
Clients who pair rate strategy with disciplined budgeting report bid-price accuracy within 2%, faster award decisions, and healthier bottom lines. Let us guide you through cost-effective financial management that wins work without risking compliance.
Frequently Asked Questions
What's the difference between provisional and final indirect rates?
Provisional rates support monthly billing based on estimated costs, while final rates reconcile actual costs in the incurred cost submission at year-end. Whether you're based in Denver, Arlington, or Washington, DC, GovIRG ensures both are accurately calculated and audit-ready.
How are indirect rates audited?
DCAA auditors test cost pool integrity, allocation methods, and allowability standards during contract audits and ICS reviews. Firms from Tysons to Capitol Hill to LoDo rely on us for preparation and representation.
When should I submit a forward pricing rate?
Ideally, submit your forward pricing proposal 90–120 days ahead of negotiations, renewals, or option-year exercises. We help GovCon teams nationwide align rates with projections.
Can rates change mid-year?
Yes—if your cost structure shifts significantly, you may request an interim agreement with your ACO. We’ve helped regional firms from coast-to-coast secure mid-year adjustments that preserve contract viability.
How does rate strategy affect profitability?
Effective indirect budgeting balances cost recovery and pricing competitiveness. Our experienced advisors model pools that safeguard your margins without pricing you out of bids.