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  • Question

    Does every business have a G&A expense? Or does it all depend on how the business is run?


    Answer

    General and Administrative (G&A) expenses are management or financial expenses incurred for the management and administration of the business as a whole.  Accordingly, by and large all businesses have G&A expenses.  The nature and amount of these G&A expenses may depend on how the business is run. 

    In the question background you state that a contractor proposed the same rate for overhead and G&A.  Having the same rate for both types of indirect expenses is an unexpected coincidence and may require additional inquiry on your part to validate.  My guess is that this contractor has only one indirect rate and that any G&A expenses they have are included in it.  To more fully resolve your questions it may be necessary to obtain the details of the components of both the pool of expenses (numerator) and the allocation base (denominator) for any and all indirect rates proposed.  

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