# Presentation: 528530

## ITIGC – Teaming & Subcontracting Committee

- Report
- September 1, 2005

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  "... any indirect rate applied must be a separate cost pool clearly distinguished from the G&A and other indirect charges in the hourly rates.  Such costs must be segregated in a separate indirect cost pool by the contractor's accounting system and must not be included in the indirect costs included as part of the fixed hourly rate for direct labor."
- The above direction (from Alliant’s 1st draft) appears to be at odds with many contractors' disclosed accounting practices.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - What we have observed
- G&A originally not incorporated into GSA Schedules
- Most contractors do not have G&A specified in their current contracts
- GSA FSS Contract Managers are unsure how to approach requests to have G&A mods made to the Schedules.  Requests are denied or ignored.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - What we have observed
- Some  GSA FTS Regional Contract Managers are not allowing G&A on ODCs or travel if the language is not in the contract.
- G&A not recovered is a cost to contractors.  It is a loss.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - Feedback from GSA
- Reorganization efforts made establishing a meeting difficult.
- Anecdotal feedback on “fully-loaded” – assumption by GSA that all G&A was loaded onto the labor rates.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - What is “fully – loaded”?
- Is it every possible cost is loaded onto the labor hour?
- All expenses in a G&A Pool allocated only over labor cost.
- G&A not recovered on travel, subcontractors, materials.
- Is it separate pools for each type of expense – labor, travel, subcontractors, materials.
- Only costs applicable to each type of expense are included in each pool.
- Each pool would have a separate rate.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - What is “fully – loaded”
- Is it all costs are accounted for and then the G&A is allocated across expenses for a company?
- Same G&A rate applied to each type of cost
- G&A recovered on labor, travel, subcontractors, materials
- What are the contractor’s disclosed practices or commercial practices?

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - Contractor’s disclosed/commercial practices
- Vary by company
- Generally don’t change for individual contracts
- Large companies generally have rates and practices audited by DCAA
- Small companies may not – but they still have G&A costs
- GSA predicated on commercial practices

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - Recommendations for GSA
- Recognize that G&A practices vary by company
- Recognize that G&A not paid according to a company’s practices is a cost not covered – if the practice is to cover G&A across all expenses, and GSA elects not to pay G&A on a specific category of expense, the company incurs a loss because the G&A was not recovered.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - Recommendations for GSA
- Establish a methodology for approving G&A on Schedule contracts to cover non-Schedule items like travel and open market expenses
- Commercial practices
- DCAA approved disclosures
- Recognize that G&A rates and practices are confidential and that general language should be in the “public” contracts, with actual disclosed rates and practices given directly to procuring CO’s either by the contractor or GSA.

## ITIGC – Teaming & Subcontracting Committee

- G&A on ODC's and travel
-  - Recommendations for GSA
- Educate the Schedule contracting officers to facilitate adding G&A to Schedule contracts – it’s a good thing.
- Educate the “buying” contracts shops that there is no “one way” to have G&A and that arbitrarily disallowing G&A results in financial loss to the contractors.