Safely Navigate Government Cost & Pricing

Trusted by Government & Contractors for Over 25 Years

Clerical Effort - Direct or Indirect? Maybe Both?

View a Printer Friendly version of this page, allowing you to print the page. Send a summary of this page to someone via email.

INQUIRY Paul: I just reviewed part of your presentation to the audience at the American Legion.  I have a concern.  Your Indirect Costs include Fringe Benefits and Payroll Taxes.  In my experience, if I have a clerk assigned to a particular contract, I classify that clerk’s wages, H&W, payroll taxes, worker’s compensation and general liability as direct costs. This is ok as long as that clerk devotes his/her full work day to that contract.  Is there a problem here?

RESPONSE - Good question and it shows colleagues such as you are delving into the issues, statements and opinions.  We received great response on this overview presentation. Feedback, such as yours provide our members/readers with valuable insight from various points of view. 

First of all, there are various ways to classify cost and it depends on a company and industry.  In making presentations I strive to select what may be typically used as examples of a “concept”.  As a matter of fact, someone could look at the methodology in your inquiry and question it because it is different then there’s.  But read on and hopefully your question gets addressed. 

The Answer: It depends!  Either way could be okay, as long as the method results in a fair and reasonable assignment of the costs to final cost objectives (contracts) AND the method is consistently used.  It must also Not result in double charging of a cost to contracts.   Let's go deeper....



To Minimize Spam - This page is only available if you have Registered as a Member (There is a FREE Registration option!). 

Not yet a Registered member? Join Today

Already a Registered Member? Please Login. You will then have access.

If you believe you should be able to view this area then please contact us and we will try to rectify the issue as soon as possible.


To gain Full Access to Member Content click here to subscribe.

You will be given immediate Full Access to premium content on the site.