New Year’s Resolution #3: I will ensure G&A expenses are related to business operations
January 9, 2023
At a glance
The full story:
Doing business with the government requires contractors who bid and win FAR Part 15 Negotiated Contracts to distinguish and segregate direct costs from indirect costs.
Indirect costs represent those expenses not readily identifiable with a particular project. Common practice is to further categorize indirect costs into subgroups or “pools.” A few examples of pools include fringe benefits, overhead and G&A.
Here, we focus on G&A expenses.
What are G&A expenses?
General and Administrative (G&A) expenses are the residual costs necessary to operate a business, regardless of whether you have government contracts.
Common examples of G&A Costs include the following:
- Labor for strategic planning, business development efforts, and to manage or perform administrative functions
- Bonuses for people who primarily charge their time to G&A
- Professional fees, such as legal, accounting, payroll processing fees and IT services
- Travel – perhaps in support of business development efforts
- Business insurance (general liability)
- State and local taxes (not federal taxes)
The bottom line
As you can imagine, this is not a definitive list of all potential costs. For more guidance, contact Aprio’s Government Contract Consulting Services team.
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