ARDAK’s Wrap Rate Development Methodology utilizes significant organic Intellectual Property (IP) providing a parametric data driven view of our client’s customers and competitors. Each analyst has at least 10 years of experience utilizing ARDAK’s IP for all Competitive Intelligence (CI) activities performed. This gives the analyst an objective view of each pursuit, despite each individual’s past experience with individual competitors. ARDAK’s Wrap Rate IP consists of three major components as follows:
- Data Sourcing and Scrubbing – ARDAK’s IP utilizes a number of data sources available within the public domain. The largest and most recognized data source is the Federal Procurement Data System Next Generation (FPDS-NG). Although FPDS-NG yields a significant amount of contract awards, the data has been consistently error prone for years. As a result ARDAK developed sophisticated data scrubbing algorithms that utilizes other data sources to rectify discrepancies in the FPDS-NG data feed. Examples of additional data sources available within the public domain that ARDAK’s software utilizes include but are not limited to latitude/longitude, CONUS/OCONUS USG military facility locations, and contractor’s annual reports. Once ARDAK’s scrubbing routines have been executed against these and other data sources, the cleansed data is stored in ARDAK’s DataMarts. After the contractual data has been scrubbed ARDAK analyzes competitor’s annual reports, 10K’s, and 10Q’s for vital financial data, which is also stored in ARDAK’s DataMarts.
- Rate Derivation (RD) Algorithms – Once a competitor’s financial and contractual data has been scrubbed and stored in our DataMarts, ARDAK runs a series of algorithms to populate a sophisticated software model. The model is an integral component of ARDAK’s IP, and is currently on version 13.5. Upon receipt of a wrap rate request the model validates that the request is for a valid cost center that has been awarded contracts from the USG. ARDAK’s IP is continually updated based upon industry feedback and changes in the Defense Contract Audit Agency (DCCA), Defense Contract Management Agency (DCMA), and Federal Acquisition Regulation (FAR) requirements.
- RD Reporting – The results of each Wrap Rate Summary, Low Level Decomposition, Material Handling, and Fee Analysis are stored in a repository delineated by year, market sector, and competitor cost center. This capability allows ARDAK to contrast and compare results from year to year to validate accuracy, but most importantly given the competitive nature of the A&D industry allows our customers to benchmark their competitiveness at the Wrap Rate Level, Wrap Rate High Level Decomposition (Fringe, Overhead, and G&A), and each element of Fringe, Overhead, and G&A within dozens of market sectors that ARDAK maintains e.g. Professional Technical Services, Systems Integration, Logistics, etc.
IP: Wrap Rate Derivation (RD) Models
ARDAK’s Wrap Rate Model is proprietary software that is used to parametrically analyze ACES data combined with competitor historical and current financial elements and other factors to estimate the competitor plant and site wrap rates.
By separating Data Sourcing/Scrubbing, RD Algorithms, and RD Reporting, ACES’ open architecture facilitates the use of contract actions from one cost center and the financial data from a different cost center. This deliberate decoupling allows ARDAK to accurately develop Predictive and Notional Wrap Rate Derivations for JV’s and M&A’s prior to their completion. For example ARDAK’s clients have purchased wrap rate for GDIT/CACI/CSRA and DXC/Vencore prior to the merger AND before contracts were actually awarded. There are multiple variants of the Rate Derivation Model including: