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By no increased cost to client you mean from what they are billed now by my company vs what I would bill them correct? Yes totally agree, was going to undercut by 5% as my overhead would be lower. Ok thank you for your perspective, it is very valuable as an initial starting point to orient myself. I am not interpreting it as financial advice or comprehensive, but good to know. I basically don't want to scare myself into not taking the leap due to paperwork and your response aligns more with what I was thinking for what I need: basic business structure as LLC, tax structure, and an invoicing system. I know my market rate, I know what my company and other companies charge for my experience level/role and I also know the prime only is entitled to the final billing rate as the derivation of this rate (Base Rate, G&A, Fringe, Profit Fee etc.) is highly protected due to competition and subs do not give this out.

Thanks I appreciate the response For 1. and 2. - an LLC is a legal entity, but can be either taxed as a disregarded entity where all profits flow back to the owner or an S corp where an S corp defines a reasonable employee salary separately from business profits as employer - isn't that how it works? How do you calculate yourself a salary, paid time off benefits etc. for Fringe when you aren't actually paying yourself a salary from a tax standpoint? For 3. For FAR do you need approved provisional rates established from the DCAA as a sub with contract value < $1 mil? Thinking of FAR 15.403-4. I am thinking only of accoutrements required for a federal contracting business specifically, but a small sub, not a prime, doing hourly consulting, so hoping this is minimal

No reason, it could be if they wanted to structure it like that, but really it's the exception for how we do things as these are mostly LOE efforts and hard to define deliverables for FFP. Are you cueing off how I only mentioned T&M or are you saying going FFP solves a lot of problems?