What is the maximum allowance for overhead that the Contractor can claim?

The maximum allowance for overhead that the Contractor can claim is capped at 10% of the Contractor's direct costs for Services. This percentage is established to ensure that contractors do not inflate their overhead claims and that there's a reasonable limit to the compensation they can receive for indirect costs associated with delivering their services.

The overhead percentage is designed to cover costs not directly tied to specific services but necessary for the overall operation of the contract, such as administrative expenses, utilities, and other overhead costs. Setting a defined cap helps maintain transparency and adherence to budgetary constraints, especially in a public sector context like the San Francisco Housing Portal.

In this case, other options offering lower or higher percentages do not align with the established guidelines for allowance, which clearly designate 10% as the appropriate limit for overhead claims. Thus, understanding that 10% is not only compliant but serves as a standard practice helps ensure that the contractor’s claims reflect a fair and reasonable scope of indirect costs.