Indirect Rates Survey
More than 400 respondents participated in this survey representing companies with headquarters spanning 34 states. 72% of survey participants work for companies in the Washington D.C., Maryland and Virginia region. The majority of respondents (56%) are in the Department of Defense (DoD) space, but the report demonstrates involvement with nearly a dozen other federal agencies. In terms of industry focus, the Administrative, Scientific & Technical Services industry has the broadest reach among federal agencies. Also demonstrated below are participants based on number of employees. 31% of respondents have 50 employees or less and the percentage participation declined as employee counts increased.
Note that the following graphs are interactive and we encourage you to explore the charts below.
Survey results demonstrate that a three-tier rate structure to calculate indirect rates is preferred. Nearly half (44%) of respondents that use a three-tier structure have a value-added base, or a Subcontract/Material Handling (SM&H) rate. This proves that an SM&H rate isn’t needed to be competitive, but growing your base enough can drive the General and Administrative (G&A) rate down.
Average indirect rates vary by agency. Here are a few key insights from our survey results:
- Intel has the highest fringe rate followed by HHS, USAID, and EPA
- NASA has the lowest G&A rate while USAID contractors have highest G&A Rate
- A single overhead rate is common among DoE contractors
What does all of this tell us? Hiring and retaining a highly-skilled workforce in the Intel space warrants robust fringe benefits. For those working in the USAID space, the costs of doing business abroad increases your fringe and G&A costs, therefore your wrap rate can end up being greater than those in other agencies.
The average wrap rate for contractors that have a Contractor Site rate is 2.21. With USAID contractors having an average wrap rate of 2.54 and DoS contractors having an average of 1.84 wrap rate. The average Client Site wrap rate is 1.94, with USAID coming in on the high side with 2.25 and DoS at 1.65. For those contractors that have a single OH rate, the average was 2.01 with USAID on the higher side with 2.61. DoS was at the lower end again with a 1.64.
Competitive indirect rates are the key to success in this era of cost-competitive, low-priced, technically acceptable awards. This data will help you evaluate how your indirect rates match up to industry standards and provide insights on how you can become more competitive. Aronson can help you to develop or enhance your indirect rates strategy. Contact Donna Dominguez at 301.222.8232 or by email email@example.com to learn more.