BU

A Business Unit is an organizational segment within a company that operates with defined responsibilities, resources, and performance accountability. BUs may be organized by market, product line, geography, or function and serve as the basis for indirect cost allocation and management reporting.

In government contracting, BU designations affect indirect rate structures, cost accounting, and organizational conflicts of interest. DCAA audits examine how costs are allocated across business units. Understanding BU structures helps contractors maintain compliant accounting systems and appropriately allocate costs to government contracts.