Indirect Rates for Government ProposalsEstablishing realistic budgets will not only allow financial management of the company but will also support provisional billing rates (PBR) proposals.  If the proposal and supporting budget are not prepared correctly, lower indirect rates and reduced cash flow for Government contractors can often result.  In many cases the profitability of a Government contract, such as a Cost Type Ph II SBIR contract, is heavily dependent on the DCAA provisional rate submissions being correct.  To do this you should ask yourself:

  • What are the procedures for establishing Provisional Billing Rates?
  • When should we submit?
  • What information should we provide?

ReliAscent has worked with hundreds of small businesses over the last 20 years and can efficiently and cost effectively prepare or coach the preparation of a viable budget and DCAA Provisional Rate Submission.  The Budget and Provisional Billing Rates will meet the government’s requirements, as well as, ensure the structure supports the company’s business plans and model.

Some common problems with DCAA Provisional Rate Submissions are typically found in areas such as:

  • Accounting for unallowables
  • Failure to adjust provisional billing rates to actual costs
  • Establishing a Basis of Estimate that is logical, reasonable, allocable, allowable and adequate
  • Supportable and certifiable


One of the most common (as-needed) consulting services provided by ReliAscent's experts are indirect rate / provisional billing rate development for small businesses working on an SBIR Ph II proposal. Many small business that are new (or relatively new) to the SBIR/STTR program may have zero experience calculating the rates needed for their Ph II proposal, and making mistakes or simply taking the "safe rate" or "de minimis rate" offered by the government can result in the loss of tens of thousands of dollars on a Ph II contract. 

One of the most common questions we get at ReliAscent® is "how do I even calculate my indirect rates if I am a start-up, or if this would be my first Ph II contract?" Indeed, it may seem hard to understand how it is even possible to calculate rates for a business that doesn't have the historical data to accurately calculate them. But, even in these cases, it is still possible for an expert to help develop a rate for your proposal, to ensure you are not leaving money on the table.

In cases like this, a small business needs to do their best to forecast their revenue, project costs, and indirect expenses for the immediate year of the proposal, in order to establish indirect rates for the SBIR Ph II proposal. If the proposal is for a cost reimbursement contract, rates calculated in this manner will be the basis for establishing a “contract cost ceiling” (and a fixed fee). Once the SBIR Ph II contract is negotiated and awarded, contractors are then asked by DCAA to submit a “Provisional Billing Rate” proposal. This establishes a consistent indirect billing rate for each annual period of the contract. 

In most cases, all we need to help a small business develop their rates for a Ph II proposal is the previous year's P&L.



In most cases, developing your indirect rates for an SBIR Ph II proposal, just like a Provisional Rate Submission, will take as little as 3-6 hours with one of our experts.  To get started on the process, ReliAscent® will send you an NDA and MSA to sign, and a one-time retainer of $1,500 is required (which we bill against and do not exceed without explanation authorization). In most cases, there will still be several hundred dollars leftover from this retainer which can be used for other consulting services, or towards the accounting system setup costs if your Ph II is awarded and you begin monthly accounting services with ReliAscent®. To learn more about our services or begin an inquiry,  contact us today.