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No Administrative Fee On Cost-plus Contract Overhead

Monday, October 03, 2005 04:11 pm

No Administrative Fee On Cost-plus Contract Overhead

A Washington court has ruled that on a cost-plus contract, a contractor could not charge for administrative time. Those efforts were included in the overhead and profit mark-up.

William Randall awarded a contract to Keever & Associates, Inc. to construct a barn and residence in Kittitas County. Keever was to be paid the actual cost of labor and materials plus ten percent for overhead and profit.

Late in the project, a payment dispute developed. At issue was a $55 per hour charge assessed by Keever for the time its president spent administering the [...]

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