A General Contractor Makes $1.3 Million on a $10 Million Job, Here's Where That Number Comes From

Profit margins in federal contracting vary wildly by contract type, and in this clip DOD contracting consultant Ryan Atencio breaks down real numbers across the spectrum, from a small painting blanket purchase agreement up to a major general contractor project.

Ryan Atencio, a former DOD contracting officer representative and 12-year Army special operations veteran, explains the difference between markup and profit, why large integrators average only 10 percent, and how subcontractor cushion protects a general contractor from being squeezed on a change order.

Key points discussed:

- A general contractor typically targets 12 to 13 percent profit margin on federal construction work - On a $10 million construction project at 13 percent, that works out to roughly $1.3 million in profit after everyone is paid - Large defense integrators average around 10 percent profit across all combined services and supplies, even when individual line items run higher or lower - Markup added to a subcontractor's price is cushion, not profit, and protects against underbid subcontractors coming back for change orders - Small businesses without overhead or GNA costs can profitably run a blanket purchase agreement at 9 to 12 percent margin - Professional and technical advisory services are expected to see shrinking margins as AI reduces the value of pure knowledge work

CHAPTERS

0:00 - The difference between markup and cushion in a construction bid 1:30 - How an underbid subcontractor comes back for more money 3:10 - Standard profit margin for a general contractor on federal work 4:20 - The real dollar math behind a $10 million construction project 5:40 - Why large defense integrators average only 10 percent profit

Mindy gives you the federal opportunities, agency signals, recompete intel, and pursuit briefs that tell you not just what contracts exist, but which ones to chase and how to win them.

Sign up for free Daily Alerts and get opportunities delivered to your inbox before the day starts.

👉 Get your free Daily Alerts here 🔗 https://getmindy.ai

Connect with Encore Funding: http://govcongiants.org/funding