DBE Next Steps: Overhead Schedules & Unallowable Costs-DBE Next Steps Overhead Schedules & Unallowable Costs Slides

DBE Next Steps Overhead Schedules & Unallowable Costs Slides

Pdf Summary

The presentation by Stambaugh Ness, led by Robert E. Jones, CPA, CPCM, focuses on understanding overhead schedules, indirect cost rates, and identifying unallowable costs in government contracting. Key learning objectives include defining direct labor, fringe benefits, and general overhead costs, learning how to calculate overhead or indirect rates, and recognizing common unallowable costs under the Federal Acquisition Regulation (FAR).<br /><br />Indirect costs are categorized into cost pools: direct labor (primarily W-2 labor, excluding subcontractors), fringe benefits (employer taxes, health insurance, retirement, paid absences, and sometimes additional perks), and general overhead (costs supporting multiple contracts or overall business operations like supplies, training, accounting, HR, IT, marketing, and legal services).<br /><br />Calculating indirect cost rates involves determining the appropriate cost pools and bases, with the rate being the ratio of pool to base. Various factors affect the rate, including company policies, overtime premiums, types of services, entity structure, benefits, bonuses, and geographic location. Common issues in rate calculation include using incorrect general ledger accounts, co-mingled labor and non-labor costs, mismatched cost structures, and formula errors.<br /><br />The presentation also emphasizes compliance with FAR Part 31 contract cost principles, which require costs to be reasonable, allocable, conform to CAS or GAAP standards, and align with contract terms. Several costs are specifically addressed as unallowable or limited, such as general advertising, alcohol, charitable contributions, entertainment, executive compensation (subject to limits), fines and penalties, interest, lobbying expenses, related-party rent (limited to effective ownership costs), and certain taxes.<br /><br />Additional services offered by Stambaugh Ness include indirect rate strategy, policies and procedures reviews, FAR readiness assessments, GAAP compliance analysis, and ICQ evaluation. Training sessions and on-demand resources are available for government contractors seeking to improve their understanding and compliance with FAR and AASHTO guidelines. Contact information for Robert Jones is provided for further assistance.

Keywords

overhead schedules

indirect cost rates

unallowable costs

government contracting

Federal Acquisition Regulation (FAR)

direct labor

fringe benefits

general overhead costs

cost pools

FAR Part 31 compliance