Indirect Cost Series: Part Five – Additional Considerations

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This is part five of a five-part series on indirect costs.

As we wrap up our series on indirect costs, it’s important to remember the key takeaways from parts one through four:

  • Indirect costs are costs that are directly attributed as construction costs but are not easily identifiable to specific contracts.
  • Indirect costs must be allocated in a systematic, rational, and consistent way by accumulating them into cost pools, then allocating based on cost drivers that have a strong relationship with the incurrence of costs.
  • Project bids should include estimated allocated costs to maximize contract price, which, in turn, will maximize profit.
  • Accurate budgeting must …read more

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