Indirect Rates

Government contractors bill the federal government through three indirect rate pools: fringe, overhead, and G&A. Each pool captures different cost types, uses a different allocation base, and carries different DCAA audit risk. Getting the pools wrong inflates your rates, misallocates costs, and draws audit findings.

Indirect rate calculation is one of the most misunderstood areas of government contract accounting. Here is how fringe, overhead, and G&A rates actually work, with step-by-step instructions.