Small startup companies seem to be always writing grant and contract proposals. Many times these grants and contracts are awarded with different rates and different rate structures. Having varying rate structures and indirect rates could end up costing you money in the long run. All of your company’s revenue producing jobs absorb their proportionate share of the company’s indirect rates. If you measure and bill these rates differently for all of your grants and contracts, you will end up losing money on one if not all of them.
Fixing the problem includes selecting a rate structure that fairly allocates your company’s indirect costs to all of your projects. You will then have to rebudget your grants and contracts to reflect the new indirect rates. The final part of the solution is to make sure your customer is in agreement with your company’s new cost structure.