Arcvue
Pricing and rates—the number under every bid
How a wage becomes a billing rate, one layer at a time.
The cascade from direct labor through fringe, overhead, G&A, and fee. Nine steps, each applying to a different base, and the order is not a convention—it is what makes the answer correct. Arcvue runs those nine steps on every bid, in that order, off your own filed indirect rates.
A wrap rate is the fully loaded hourly cost of an employee.
It starts at the direct labor rate and wraps indirect cost and fee around it until you reach the rate you charge the government. Every dollar of direct labor carries overhead the company incurs and does not bill separately; the wrap captures all of it in one number.
Nine steps, and each one applies to a different base.
Basis a worked cascade at illustrative rates. Each layer applies to a different base. Fringe to labor, overhead to labor plus fringe, G&A to everything beneath it—which is why the four components sum to the cost of the hour rather than compounding. Synthetic sample.
Applied in the wrong order, the arithmetic is simply wrong.
- Fringe applies to direct labor only. Not to anything above it.
- Overhead applies to labor plus fringe—the loaded-labor base.
- G&A applies to everything beneath it—the total cost input.
Each pool has its own base. Fringe does not contain overhead and overhead does not contain G&A, so applying them in a different sequence does not produce a different opinion—it produces a number that reconciles to nothing.
Where the cascade runs in the product.
- Indirect Rates—your actual pool rates, with rate targets projecting them forward.
- Pricing—the buildup for each position, at the Price stage.
- Contract Forecast—wrap rates projecting revenue and cost on staffing-based forecasts.
Provisional rates are submitted to DCAA at the start of a year; actual rates are computed from real cost at the end of it. The difference is an over- or under-recovery, and it is trued up. A wrap built on provisional rates is an estimate until that true-up happens.