XL EagleIndirect Rates (Indirect Cost Rates)
Indirect Rates stands for Indirect Cost Rates. Indirect rates are percentages used to spread shared costs across jobs. The main ones are fringe, overhead and G&A. Each is a pool of costs divided by a base, like direct labor or total cost.
On cost-type contracts, the government sets provisional rates, then adjusts to final rates after audit. On fixed-price work, indirect rates are just your tool for building a price.
Why it matters to a small contractor
Even if you never sign a cost-type contract, primes may ask for your indirect rates. Having them worked out makes you look prepared and speeds up teaming.
Example
A firm has fringe at 30 percent, overhead at 25 percent and G&A at 12 percent. These stacked rates turn $100 of wages into about $182 of cost before profit.
Indirect Rates: common questions
What is a provisional billing rate?
A temporary indirect rate used for billing on cost-type contracts until final rates are set.
Should I share my rates with a prime?
Share what is needed for pricing, ideally under a nondisclosure agreement.
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