Determining Overhead Rates in Government Contracts

December 02, 2015

As a federal government contractor, your overhead rate is essential to maximizing cost recovery. This video series provides an overview of the elements that come into play when structuring overhead rates, and presents examples of how to calculate overhead rates.

Basic Requirements of a Government Accounting System (Video 1 of 4)
The video series begins with a primer on government contracting terminology and government contract types before discussing the basic requirements of a government accounting system.


Proper Cost Pools (Video 2 of 4)

In order to calculate overhead rates, proper cost pools must be established within a government contractor’s accounting system.  This means segregating costs into direct, indirect, and unallowable cost pools.

FAR Part 31 – Cost Principles & Procedures (Video 3 of 4)
This segment explores some basics of FAR Part 31, the specific section of the government regulations that details cost principles and procedures.  Defining costs as allowable, allocable and/or reasonable, and classifying costs as direct or indirect are focal points of the discussion.

Indirect Rate Calculations (Video 4 of 4)

The video series culminates with how indirect rates are calculated and a walk-through of sample calculations.

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