Start-up government contractors are often confused by the difference between fringe, overhead and G&A expenses. The FAR gives no substantial guidance, leaving each contractor to make their own decisions.
Understanding these concepts will help you protect profits and give you the ability to negotiate new contracts effectively and competitively. Being correct and consistent in how you categorize expenses helps you effectively monitor escalating costs or eroding profit margins.
Rules for government contractors require you to distinguish and segregate direct costs from indirect costs. Common practice is to further categorize your indirect costs into subgroups (also called “pools”) – usually Fringe …read more
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