Metric
Profit Analysis
Definition
Profit Analysis (FAR 15.404-4) is the structured approach to determining fair and reasonable profit or fee. Considers contractor risk, capital investment, performance, and socioeconomic programs. Weighted guidelines method (DD Form 1547) used by DoD. Typical profit ranges: 5-15% for services, 8-15% for R&D, 10-20% for high-risk work.
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