Q.  First Question.  We have a contract that stipulates that we can add G&A to our Travel Invoices only up to a specified rate. Our actual and provisional G&A rate is much higher than the amount the contract allows us to bill. Do we have any recourse to recover our remaining G&A? Second Question. Our subcontractor claims that this rate does not apply to them and that they have the right to add their own G&A rate to their travel and then my company (the prime contractor) can add the contract stipulated G&A to the subcontractor invoice. This in effect charges the Government for G&A twice (once for the subcontractor and once for the prime contractor). Is my subcontractor correct?

A. First Question. It seems like the G&A rate applied to travel costs is capped no matter how high the actual rate goes - I see no way to get around that unless the wording establishing the cap is unclear. Second Question. You need to examine the contract to see if your cap applies to subcontractors’ rates also and whether there is a prohibition against the double G&A charge (I doubt both). If the contract is silent, then normally the cap applies only to your G&A rates and the subcontractor is free to add their projected indirect rates onto their direct costs, including G&A. The government usually does not prohibit pyramiding of costs.

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