How to Forecast a Contract

Before You Start

• You need an active user account with write access (any role except read-only).
• At least one sync cycle must have completed so your contracts are loaded.
• If you're using the Staffing Calculator method, have your position-level bill rates and pay rates ready.

Step 1—Navigate to Contract Forecasting

From the main navigation, select Forecast. You'll see four tabs across the top:

Tab	What It Shows
Portfolio Overview	All contracts with revenue, cost, and margin summaries for the selected fiscal year
Contract Forecasts	Every contract with its ceiling, revenue to date, forecast revenue, GP%, and approval status—and a toggle to show expired ones
Submissions	Forecasts submitted for approval
Assumptions	The assumptions the forecast is built on

Screen the Forecast module as it ships.

Start from whichever view makes sense. Portfolio Overview is useful for seeing the big picture first—the division breakdown expander at the top shows how revenue and profit are distributed across your organization.

Step 2—Select a Contract

Click on the contract you want to forecast. The contract editor opens with four tabs: Contract Info, Actuals, Forecast, and What-If.

Step 3—Review Contract Info

Before forecasting, check the Contract Info tab to confirm division, client, contract type, and period of performance dates are accurate.

If you have CEO or COO access, you'll also see Out-Year Parameters:

Field	What It Controls
Recompete?	Whether this contract is up for recompete in out-years
PWIN %	Probability of winning the recompete (only if Recompete = Yes)
Recompete Size %	Expected size relative to current contract
Annual Growth %	Year-over-year growth rate applied in out-year projections

Screen the Contract Info tab, CEO/COO view.

Set these parameters now so downstream scenario and out-year models use realistic assumptions.

Step 4—Review Prior Year Actuals

Switch to the Actuals tab. This shows last year's monthly performance across Revenue, Direct Cost, Gross Profit, and GP%.

Use actuals as your baseline. If last year's contract ran at 32% GP and you're forecasting 40%, you need a documented reason—a rate increase, staffing mix change, or scope modification that justifies the improvement.

Step 5—Choose a Forecast Method

Switch to the Forecast tab for the year you want to forecast. The Forecast Method dropdown at the top is the most important decision in the process.

Method 1: Manual Entry

You type revenue and cost values directly into the monthly grid—no automation. Best for custom forecasts from a proposal, task order modification, or contract structure that doesn't fit another method.

Method 2: Copy from Actuals

Pre-fills every month using a prior year as the source, scaled by a growth factor.

• Select a Source Year from the dropdown
• Set the Growth Factor % slider (−50% to +50%)
• Arcvue pre-fills each month: Prior Year Value × (1 + Growth%)

Best for steady-state contracts where last year is a reliable predictor. A 3% growth factor on a stable T&M contract is a common starting point.

Method 3: Staffing Calculator

The most powerful method—builds the forecast from the ground up using position-level rates. Add one row per FTE to the staffing table:

Field	What to Enter
Position / LCAT	Job title or labor category name
Bill Rate ($/hr)	What you charge the client per hour
Pay Rate ($/hr)	What you pay the employee per hour
Staffing %	Expected utilization (95% = 5% vacancy assumption)

Screen the Staffing Calculator as it ships.

You can optionally model a mid-year rate change by checking Rate Escalation and setting an effective month, bill rate increase %, and pay rate increase %.

For subcontractor costs, choose between Daily Rate from Prior Year (system calculates from last year's subs) or Manual Monthly Amount. Enter flat monthly amounts for Travel, Materials, and Other Direct Costs.

Expand the Prior Year Actuals Reference to see last year's monthly revenue and cost per workable day—a quick sanity check that your staffing assumptions produce numbers in the right ballpark.

Expand the Workable Days Reference to see the forecast year calendar. Revenue naturally varies month to month because February has fewer workable days than March.

Method 4: Time & Materials (Simple)

Best for short-duration consulting or staffing contracts where position-level detail isn't needed. Enter aggregate assumptions—hours per month, blended bill rate, blended labor rate, sub costs, travel, ODCs, and months active.

Method 5: Fixed Price

For FFP contracts where you know the monthly revenue and target margin. Enter Monthly Revenue, Target GP%, Months Active, and how total cost splits across labor, subs, travel, and materials.

Step 6—Review and Adjust the Monthly Grid

Regardless of method, the result is a 12-month grid you can edit directly. The method pre-fills it, but you can override any cell.

Column	Editable?	What It Shows
Month	No	Jan through Dec
Revenue	Yes	Monthly billed revenue
Direct Labor	Yes	Monthly labor cost
Subcontractors	Yes	Monthly subcontractor cost
Travel	Yes	Monthly travel cost
Materials	Yes	Monthly materials cost
Other	Yes	Other direct costs
Total Cost	Auto	Sum of the 5 cost columns
Gross Profit	Auto	Revenue minus Total Cost
GP%	Auto	Gross Profit / Revenue

Screen the monthly grid as it ships.

You can paste directly from Excel. Select cells in your spreadsheet, copy, click into the grid, and paste.

Below the grid, four metric tiles show annual totals for Total Revenue, Total Direct Cost, Total Gross Profit, and GP%. Expand Cost Breakdown to see the annual cost split across all categories.

Step 7—Save or Submit

Button	What It Does	When to Use It
Save Draft	Saves your work—you can come back and edit later	You're still refining the numbers
Submit for Review	Locks the forecast and sends it to CEO/CFO for approval	You're confident in the numbers

Screen the forecast submission controls.

After submission, the CEO/CFO sees your forecast in the Forecast Approval Panel on the Portfolio Overview tab. They can Approve, Send Back to Draft, or Unlock for Revision.

Using the What-If Tool

The What-If tab answers: “If I change billing rates or pay rates, what happens to my margins?” It's a read-only sandbox—nothing you do here changes your actual forecast.

If you have staffing positions, Arcvue shows your positions with four columns: Pay ($/hr), Bill ($/hr), Proposed Pay, and Proposed Bill. Set the Effective Starting Month—the month your proposed rates take effect.

If you don't have staffing positions, two sliders appear: Direct Labor Cost Change % (−30% to +30%) and Revenue Change % (−30% to +30%).

The tool produces two outputs. Impact Summary—6 metric tiles: Revenue, Gross Profit, GP%, DL Cost, Net Profit, and Net%—each showing before/after values and a delta. Net% is the most important number; it shows profitability after your company's indirect rates (wrap rate) are applied. Monthly Detail Table—expand to see month-by-month impact. Each row shows before and after values; the GP Delta column highlights which months benefit most.

The What-If tool uses your company's current indirect rates. If your wrap rate is 2.5x, every dollar of direct labor costs $2.50 fully loaded. A $5/hr raise on one FTE costs roughly $26,000/year fully loaded—not just $10,400 in direct labor.

The raise, per hour5.00

Hours in a work year2,080

Direct labor, one year10,400.00

Wrap rate indirect applied to direct labor2.50

What it costs fully loaded26,000.00

Basis a worked example at an illustrative wrap rate. The direct number is not the cost. Deciding a raise against the $10,400 line rather than the $26,000 one is how a margin plan stops being true.

The Operator’s View

When it comes to contract revenue, there are only three variables that can move your projection: vacancies, time off, and bill rate. That’s it. A conservative applied weighting on staffing is the simplest way to build buffer into a forecast without manufacturing numbers.

The more meaningful mistake happens on the cost side—and it’s a management design problem, not a math problem. Too many firms hold Division Leads and PMs accountable to net profit. That’s the wrong target. Indirect rate fluctuations flow through net profit, and in most firms those rates are set and controlled by the C-suite. Punishing a PM for something they can’t touch isn’t accountability—it’s noise.

What a PM can control is direct labor, subcontractors, and ODCs. Those are the levers they pull every day. Build your performance framework around gross profit, give your PMs visibility into their direct cost drivers, and you’ve created the conditions for genuine ownership. The difference between a good PM and an exceptional one often comes down to whether they’ve been given the right number to manage and the tools to manage it. Forecasting starts there.