"Reasonable" Profit Margin in T&M Labor Rates
Started by Former_DCAA · May 11, 2021 · 2 replies
- FOriginal post
Former_DCAA
May 11, 2021 · 5y ago
We're bidding on a T&M Contract that will be 90-95% labor and we're required to provide a breakdown of T&M rates - Salary, Fringe, OH, G&A and Profit Margin. We've historically bid 10% margin (nobody can point to why). That seems low to me but I can't find any benchmarking or guidance that would says either way. Does anyone have suggestions or data that provides "typical" T&M profit margins.
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here_2_help
May 12, 2021 · 5y ago
With respect to labor billed at the contract's hourly billing rates, the contract is effectively a fixed-price contract. Bid the same profit rate you would bid on a FFP.
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Former_DCAA
May 12, 2021 · 5y ago
here_2_help said:
With respect to labor billed at the contract's hourly billing rates, the contract is effectively a fixed-price contract. Bid the same profit rate you would bid on a FFP.
Makes sense, thanks.