![]() G&A costs are all other costs necessary to run the business, such as business insurance and accounting costs. In this instance, the offsite overhead pool might include costs for facilities and/or depreciation of office equipment used for contracts, whereas onsite might not include these costs. The term “onsite” refers to work that is performed directly at a government’s facility. Overhead poolscan be further broken down into onsite and offsite overhead pools. All costs that contribute to the ultimate completion of the contract but cannot be expressly allocated to one particular contract can be classified as overhead costs. In addition, overhead costs could consist of overhead salaries, applicable fringe benefits on those salaries, insurance, supplies, printing costs, temporary staff, training and education, office rent, local travel, meals, and repair and maintenance. Overhead costs also include costs related to the ultimate completion of a direct contract, such as supplies purchased and used on multiple contracts. For example, the wages of a supervisor, who oversees employees working on many contracts but does not directly contribute to the contracts, would be considered overhead costs. ![]() ![]() Overhead costs are attributable to labor but not directly attributable to a contract. Here are some examples that will help provide clarity when deciding how to allocate different types of costs. Some examples of fringe benefit costs include payroll taxes (i.e., Social Security, Medicare, state and federal unemployment taxes), paid leave (i.e., vacation, holiday leave, jury duty, other leave), and other benefits (health and dental insurance, 401(k), etc.).ĭeciding whether a cost should be included in the overhead cost pool or the G&A cost pool can be challenging, as the standards give some latitude when it comes to the definitions of each pool. These cost pools might include fringe benefits, overhead, or general and administrative (G&A) costs. Indirect costs, which are costs that cannot be directly allocated to a specific contract, can be grouped into one or more cost pools. ![]() One of the biggest challenges for government contractors is properly allocating indirect costs into the right cost pools. As a government contractor, you are required to properly segregate and track your costs in accordance with the standards defined in the Federal Acquisition Regulation (FAR). ![]()
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