ARDAK developed extensive software and financial models used to predict contractor fees based upon the contract type. ARDAK analyzes actual prime contract award activity to estimate the fee structure for each competitor cost center. ARDAK then selects prime contract awards of similar size and scope which have sufficient detail to determine the contract man loading. Each cost centers’ fee is compared to the operating margin to validate the analysis. An example of this analysis is shown below:
IP: Fee Analysis
The analysis shows that Competitor One’s fee structure is somewhat greater than the business unit as a whole. This is due to the high percentage of Fixed Price contracts awarded to Competitor One.
Competitor Two and Competitor Three’s fee structure is effectively the same as their respective business unit’s operating margin. Both of those cost centers were awarded a high percentage of Time and Materials contracts.