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Subcontractor Wrap Question


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I just started working with a new company and I think they are applying their subK burden wrong. They are only applying the G&A cost on the subK burden costs and not the actual subcontract costs also. Isn't it allowable to apply G&A ontop of the SubK costs+ the SubK burden costs?

example

SubK total cost $100

SubK burden 5% = $5

G&A 10%

What should the total cost be?

I think it should be $115.5

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Sounds like your new company may be using a value-added cost base whereby material and subcontract costs are removed from the base used when G&A expenses pertain more to the contractor’s in-house activities than to material and subcontract activity.

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SpartanHead, I would add to the previous comments that since you are new to your company, you could benefit from an appointment with your Government Accounting department. They can explain the cost structure, the burdening sequence, and alert you with any other items that are pertinent to your position there. I always make a point to spend time with new people and provide them with all the tools they need to be compliant!

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