G & A and Profit Margin

Is there any resource where I can determine the reasonableness of general and administrative (G&A) and profit charged in a change order? I've been asked to evaluate a subcontractor's purchase of equipment, hand tools and consumables valued at $35,706, which the subcontractor assessed a 14.6% G&A and 10% profit. That seems unreasonable to me, but I could be wrong.

DMB044,

There is no resource such as you have asked for. Each situation is dependent on the circumstances - type of contract, type of work, risk of performance, specific contractor, line of business, importance to overall success, etc. In some circumstances, the G&A and profit might be reasonable, while in others they may not.

This archived discussion may help you - wifcon.com/discus/messages/8525/10292.html

Is there any resource where I can determine the reasonableness of general and administrative (G&A) and profit charged in a change order? I've been asked to evaluate a subcontractor's purchase of equipment, hand tools and consumables valued at $35,706, which the subcontractor assessed a 14.6% G&A and 10% profit. That seems unreasonable to me, but I could be wrong.

In regard to G&A, does the contractor have approved billing rates for its indirect costs? If so, do you have some information that indicates that those billing rates are not reflective of what the final rates for the year will be? If the answer to the latter question is "no," the G&A rate sould be considered reasonable because the costs that are in the G&A pool must be allowable, which includes being reasonable.

What type of a contract is this- services, construction, etc.?