Glossary term
Indirect Rate
The rate at which overhead, fringe, and general and administrative costs are allocated to contracts.
Indirect rates spread costs that cannot be charged directly to a single contract — facilities, benefits, corporate management — across the contract base. Typical pools are fringe, overhead, and G&A. Rate structure drives competitiveness on cost-type and T&M work, and understanding your wrap rate is essential before pricing a services bid.
Categories
- financial
Related terms
- Wrap RateThe multiplier applied to direct labor cost to produce a fully burdened billing rate.
- DCAAThe Defense Contract Audit Agency — the government's auditor for contract costs and accounting systems.
- Cost-Plus-Fixed-Fee (CPFF)A cost-reimbursement contract where the contractor is repaid allowable costs plus a negotiated fee that does not vary with actual cost.