Should you charge more for gov't contracts? And why?

[Kristina Fowler]

So that's my question. Should you charge (or bid ) higher on government contracts for aerial gigs as opposed to your standard rates? ... and why? Should you juice your rates based simply on the grounds of the "$600 toilet seat" stigma? Is it generally understood amongst bidders for a Fed job that rates will be higher simply because they're the Feds?

 

[Richard R]

Absolutely not!!!! One of the things that auditors look for is reasonableness of costs. Unless there is some justifiable reason for charging one customer (e.g. The Government) more than others, everyone should be getting comparable rates. On a recent government project where I was subcontracting as a consultant, I had to certify that the rates I was charging were the same as for my other customers. The only way you should charge more is if more work such as additional processing or certifications are required for that job. And, again, you will need to justify it.

 

[KongWerks]

... And generally the $500 toilet seat, $18,000 wrench etc. have explanations that sort of make sense and the way that the cost was calculated is misleading when reported.

I think at my last job we worked out that it cost the company $2000 to generate an accounts payable check.

I'm sure there are a lot of cases where the government is overcharged but generally the government gets a better rate than private businesses do just because they are guaranteed to pay the invoice.

Of course 3 days before budget year end all that goes out the window lol

 

[sar104]

Government agencies are often charged more because of the onerous burdens that they attach to contracts, in terms of liability, QC or other aspects.

 

[BigAl07]

We don't bid Govt jobs higher... in fact we bid them with tighter margins and usually come in the money. The good part is once you get in and figure out the hoops & hurdles you get more and more work. It's a pain at first but then you become the Go-To and it gets easier (aka more profitable).

Of course 3 days before budget year end all that goes out the window lol

I see someone else been through the "last week of the budget year" race. I work with a State agency and last week my email has been on FIRE trying to get everything in "under the wire".

 

[With The Birds]

You may get away with charging more but it will likely be a one off. It's a bit of a misconception that govt contracts are more lucrative. When you look at the conditions and specifications of the job generally you will find that while the job could almost always have been completed at a lower cost it would have been to a lower standard and with a lot more flexibility in how the contractor might ordinarily have gone about it. The tendering process goes some way to ensuring a ceiling in pricing. Unless your mates with an official who has some say in approving jobs but then I would be running a mile, more trouble than it's worth.