What accounting treatment does your Industrial Funding Fee (IFF) get?
Started by Michael11 · Jun 23, 2018 · 3 replies
- MOriginal post
Michael11
Jun 23, 2018 · 7y ago
In a case where you priced your bid with labor rates that include Industrial Funding Fee (IFF), and you invoice those same labor rates to your client, which would be your 'sales', in a T&M contract, you could take the entire value of the invoiced labor, times it by .0075 and that would be your IFF on labor. You could apply the same .0075 on any invoiced ODCs. Would this method be incorrect? Is there a better method?
Someone has suggested that when an award is made to a price that included IFF on labor rates, the IFF portion is essentially not 'yours', and is reserved strictly for IFF. so they go through the trouble of tracking the contract value at the amount less the IFF. I'm guessing they do something similar to the above when it comes time to calculate the bill. This doesn't sound logical.
Thinking about this always makes my head hurt. Is there more than one way to skin this cat?
- M
Moderator
Jun 23, 2018 · 7y ago
It might help to define IFF. I'm guessing it is Industrial Funding Fee. See the following Forum Rule:
16. Abbreviations are to be kept to a minimum--preferably none at all--so that others can interpret a post and respond to it intelligently.
You only need to post it like this the first time you use it: Industrial Funding Fee (IFF). That should help getting responses.
- M
Michael11
Jun 23, 2018 · 7y ago
Thanks Bob!
- h
here_2_help
Jun 23, 2018 · 7y ago
It seems fairly clear to me at the IFF is a "fee" paid to GSA for the privilege of selling stuff on a Schedule contract. You actually have to pay it to the GSA; it's calculated as a percentage of sales, isn't it? Accordingly, I think that when you are trying to calculate sales, the IFF should be excluded--i.e., subtracted from actual billings. I am not certain but I believe you pay the IFF on all billings, regardless of whether it was priced into every element.
I hope this helps. Your question was a bit "vague" so I had to interpret.