A well-designed and effective Indirect Overhead Rate Structure is a critical element in being a successful and compliant government contractor. The goals of a competitive Indirect Overhead Rate Structure are to optimize cost recovery, improve the company’s competitive position, ensure compliance with the applicable laws and regulations and to minimize administrative burden.
Among the key questions to consider and answer are:
A key element of CGS’ approach to developing the optimal Indirect Overhead Rate Structure is our proprietary competitive analysis. Using known industry data points, we can analyze the competitiveness of the various alternative Overhead Structures to determine whether the proposed alternative structures will give us a competitive edge. This analysis is important not only from a historical perspective, but perhaps more importantly, where the company is going in the future in terms of markets, customers, contract types and mix, etc.
CGS has helped numerous clients to develop, analyze and implement their Indirect Overhead Rate Structures and Corporate Office allocations including a large, international Engineering and Construction firm with $15B+ in annual revenues. The new approach that we developed and implemented helped to improve annual costs recovery at the business unit by $10M+ each year and to compliantly recover over $175M/year in Corporate Office costs.
Please contact us today to learn how we can help to improve your company’s cost recovery and profitability as well as gain a competitive advantage.