Profit Guidelines for Construction Calculator
by Christy Watts, Professor of Contracting, Defense Acquisition University
| Factor | Rate | Weight | Value |
|---|---|---|---|
| Degree of Risk | 20 | ||
| Relative Difficulty of Work | 15 | ||
| Size of Job | 15 | ||
| Period of Performance | 15 | ||
| Contractor's Investment | 5 | ||
| Assistance by Government | 5 | ||
| Subcontracting | 25 | ||
| Profit Percentage = | |||
Instructions
This tool calculates a fair and reasonable profit percentage for construction contracts (basic or modification). For each factor, select a weight (0.03 to 0.12) based on the circumstances of the procurement action then press the calculate button.
The tool calculates the value column by multiplying the rates by the weights entered. The sum of all the values is then combined below to provide a fair and reasonable profit percentage. Click on any of the factors to view additional information for determining weights.