XL EagleG&A (General and Administrative)
G&A stands for General and Administrative. General and administrative costs are the expenses of running the company as a whole. Think accounting, office staff, executive time, business insurance, legal and IT.
G&A is usually figured as a percent of total costs and added to every job. It is the last indirect rate applied before profit.
Why it matters to a small contractor
Your time on bids, invoices and payroll is real cost. G&A is how that cost gets paid back through your jobs.
Example
A company's yearly G&A is $90,000 and its total job costs are $900,000. Its G&A rate is 10 percent, so a $50,000 job carries $5,000 in G&A.
G&A: common questions
Do I need a G&A rate as a small business?
You do not need a formal rate on fixed-price work, but you need to cover the cost somewhere in your price.
Does the government audit G&A?
On cost-type contracts, yes. On fixed-price work it is usually not audited.
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