How should I determine the indirect rates for use in Appendix C (Contract Pricing Worksheet)?

The indirect rate structure embedded in the formula under Schedule A in Appendix C is as follows:

1. Fringe benefits—allocated on labor;
2. Overhead—allocated on direct labor and fringe benefits; and
3. General and administrative expense (G&A)—allocated on total cost input (TCI).

These indirect rates and formulas represent typical calculations; however, please complete using your firm’s standard business practices. You may edit the gray cells in the provided spreadsheet accordingly. Please include a narrative explanation of your proposed rates in the narrative section of Appendix C.

In addition, please consider the following guidelines and include this information as attachments to Appendix C when appropriate:

• The rates should be based on a full accounting year.
• If this is the company’s first year of doing business, the rate should be based on projected costs that include all of the company’s other work.
• If the company has previously performed other Government contracts, please provide the last year’s historical indirect rates.
• An Excel spreadsheet (saved as a PDF and attached to Appendix C) may be submitted to show the detailed indirect rate calculation.
• Include what the base is for the indirect costs. (In other words, what the rate will be consistently applied to.)
• All direct and indirect costs must comply with Federal Acquisitions Regulation (FAR) 31.205. The offeror must ensure that that all unallowable costs as listed in the FAR are not included in any calculations.
  • Examples of unallowable costs are advertising, alcohol, bad debts, charitable gifts/donations, entertainment, fines and penalties, interest, lobbying, federal taxes, and travel costs over government per diem rates. See FAR 31.205 for the complete list.