Structuring Indirect Rates. Presented by: Donna Dominguez & Nicole Mitchell January 18, 2011. Donna M. Dominguez – Managing Consultant. - PowerPoint PPT Presentation
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Donna M. Dominguez – Managing ConsultantDonna M. Dominguez – Managing Consultant
Donna Dominguez joined Aronson LLC in 1999 and is a Managing Consultant in the Government Contracts Services Group. With more than ten years experience working with government contractors, she specializes in the preparation of incurred cost submissions, budgets, business consulting, cost proposals, contract/subcontract administration, contract/subcontract negotiation and assisting clients in the use of Deltek GCS, CostPoint, and QuickBooks software.
Through her work in public accounting as well as positions held directly with private government contractors, she has comprehensive knowledge and understanding of the complexities of accounting for this unique market. Donna earned her Bachelor’s of Science in Accounting from the University Maryland and has completed additional coursework in Contracts Administration.
Nicole M. Mitchell – Director of Financial Nicole M. Mitchell – Director of Financial Compliance Compliance
Nicole M. Mitchell joined Aronson LLC in January 1998 and serves as a Director in the Government Contract Services Group. She specializes in accounting and financial issues impacting government contractors. She has a broad based background in generally accepted accounting principles and cost principles related to government contractors including the Federal Acquisition Regulations and Cost Accounting Standards.
Nicole has been a guest speaker on various financial and government contracting topics for such organizations as the AICPA, MACPA, Deltek Insight Conference, Howard County Chamber of Commerce, Montgomery County Chamber of Commerce, as well as Aronson & Company. She co-authored a Thompson RIA reference manual for controllers “Doing Business with the Federal Government.” She received a Bachelor of Science majoring in accounting from Frostburg State University and a Masters in Business Administration from Mount Saint Mary’s College with a concentration in leadership. She received an award from the state of Maryland for one of the highest scores on the CPA exam and currently holds an active CPA license in the State of Maryland.
Direct Cost - A cost that can be identified with a final cost objective (FAR Part 31.202)
Indirect Cost - A cost that is not directly identified with a single, final cost objective but identified with two or more final cost objectives or as an intermediate cost objective (FAR Part 31.203)
• Costs are arranged into logical and homogeneous pools • Amounts are allocated based on the relationship of the expense to the
segment
Allocate - To assign or charge one or more cost objectives with an item of cost, or a group of items of cost on a causal/beneficial relationship
Service Center - Intermediate pools set up to collect costs that are attributable to multiple cost objectives.
Fringe pool is composed of statutory payroll taxes and discretionary benefits typically found in the employee handbook. Fringe base is commonly computed as a percentage of all labor both direct and indirect.
Overhead pool is composed of costs that can be identified in support one or more final cost objectives. The most common base of the overhead pool is direct labor, B&P labor, and related fringe.
SUBCONTRACT & MATERIAL HANDLINGSUBCONTRACT & MATERIAL HANDLING
Subcontract & Material Handling pool is composed of costs that support the award and administration of subcontracts and purchase orders. The most common base of the subcontract & material handling pool is subcontract labor, subcontractor travel & ODCs, and materials.
Typical costs– Subcontracts labor– Accounts Payable for Subcontractors– Facilities/IT Service Center Allocation– Travel
GENERAL AND ADMINISTRATIVE GENERAL AND ADMINISTRATIVE
G&A pool is composed of indirect expenses that cannot be easily attributed to any specific contract objective but are for the general benefit of the company as a whole. There are two types of G&A base total costs input or value added (the most common value added G&A base is over total costs before B&P/IR&D and SM&H base) .
Service Centers or intermediate pools are set up to collect costs that are attributable to multiple cost objectives in order that they may be fairly and equitably allocated in a causal/benefit relationship.
Most common: Facilities and IT/Communication Reasonable basis allocation methods: Square Footage, Labor Hours, Headcount, or Labor DollarsTypical costs in a facility service center