The General and Administrative (G&A) indirect rate is one of the most important calculations in an incurred cost proposal. It determines how a contractor's general business expenses are allocated across all final cost objectives — including government contracts. Getting this calculation right is essential for DCAA audit compliance and accurate contract billing.
What Is the G&A Indirect Rate?
The G&A rate is calculated by dividing total G&A pool costs by the total allocation base. G&A pool costs include expenses that benefit the entire organization but cannot be directly charged to specific contracts — such as executive salaries, corporate office rent, accounting, HR, and legal costs. The resulting rate is expressed as a percentage and applied to each contract's base to distribute these costs proportionally.
CAS 410 Base Selection: TCI, Value Added, and Single Element
CAS 410 (Allocation of Business Unit General and Administrative Expenses) requires contractors to select an appropriate allocation base for G&A expenses. The three most common bases are Total Cost Input (TCI), which includes all direct and indirect costs; Value Added, which excludes material and subcontract costs from the base; and Single Element, which uses only direct labor dollars. The choice of base significantly impacts your G&A rate and must be consistently applied once selected.
How the Calculation Works
The G&A rate formula is straightforward: G&A Pool ÷ Allocation Base = G&A Rate. For example, if your G&A pool is $500,000 and your Total Cost Input base is $5,000,000, your G&A rate is 10%. However, complexity arises when determining which costs belong in the G&A pool versus overhead pools, handling intermediate cost pools, and ensuring proper treatment of IR&D/B&P costs under CAS 420.
Impact on Your Incurred Cost Proposal
The G&A rate flows through multiple ICP schedules. Schedule A summarizes all indirect rates including G&A. Schedule B details the G&A pool composition. Schedule E shows the allocation base. Schedule H applies the rate to individual contracts. An error in the G&A calculation cascades across the entire proposal, which is why the ICP Dashboard computes rates to 4 decimal places and automatically reconciles across all schedules.
The interactive breakdown below visualizes the G&A indirect rate calculation step by step, including pool costs, allocation base options, and how CAS 410 base selection affects your final rates.