Brent The Builder

Your math omits an important component in the calculations. Before determining the percentages, the material costs are deducted from the contract value. $20M project ~40% Materials = $8M 15% of Remaining $12M = $1.8M 40% of $1.8M = $720k I was hoping some people on here who have done a JV could share how they got their work requirements accomplished.

Everyone has probably heard of the performance of work requirements on Federal projects. Since I’m a GC, my JV needs to complete 15% of the work. As the SDVOSB partner in the JV, I need to complete 40% of that 15%. We have found some nice projects in the $10-20M range, but we have not been bidding because my partner is concerned we can’t meet the requirements for my company. This is new to us, so I’m hoping some of you have some experience on how you’ve met the 40% requirement. I’m a small company, so I’m thinking to include the cost for the project manager, rentals like dumpsters and portable toilets. I’ve heard the profit can be included in the 40%. Is the process to add up each company’s costs throughout the job, figure out the percentage of total costs for each company, then split the profit based on that percentage? That seems to be how I understand it.. If profit is included, can anyone share what they’re using or seeing on the markups for overhead and the profit line items? When I worked for a couple federal contractors in the past, I’m pretty sure we were using 10% overhead and 8-10% profit on lump sum contracts. This was before Covid though. My partner thinks profit is not that high. Can anyone provide some feedback on what you’re seeing now? It may be helpful to include the state if you share a rate since costs vary so much by area. This profit number could play a part in helping us meet our requirements. Thanks for your help.