52.232-7 Payments under Time-and-Materials and Labor-Hour Contracts
(4) The hourly rates shall include wages, indirect costs, general and administrative expense, and profit.
Can someone explain, or help me understand, the profit and how it impacts the hourly rate? I understand how the wages and fringe benefits make a fully-burdened labor rate; however, it states profits as well. How is this calculated and/or accounted for on a T&M contract?