Government Contract Wrap Rate
Build your wrap rate from fringe, overhead, G&A, and fee, then price every labor category for your bid.
Example scenario—not a forecast or verified benchmark. Enable JavaScript to edit inputs, view charts, save locally and export your analysis.
Example inputs
- Fringe rate (% of direct labor)
- 32
- Overhead rate (% of direct labor + fringe)
- 15
- G&A rate (% of total cost input)
- 12
- Fee / profit
- 8
- Competitive wrap rate ceiling
- 2
- Labor categories on this bid
- [{"name":"Program Manager","rate":72,"hours":1920},{"name":"Senior Systems Engineer","rate":62,"hours":3840},{"name":"Analyst","rate":42,"hours":5760},{"name":"Administrative Specialist","rate":28,"hours":1920}]
Example results
Wrap rate is 1.84x (1.7x cost + 8% fee): $672K of direct labor prices at $1.2M a year, a $91.81/hr blended rate.
- Wrap rate (with fee)
- 1.84x
- Cost wrap (before fee)
- 1.7x
- Annual bid price
- $1,233,908
- Blended billing rate
- $91.81
- Direct labor dollars
- $672,000
- Fee dollars
- $91,401
- Total hours
- 13,440
What stands out
Wrap rate 1.84x is under your 2x ceiling
You have 0.16x of headroom to absorb indirect cost growth or bid a higher fee on riskier work.
Each $1.00 of direct labor bills at $1.84
Fringe adds $0.32, overhead $0.20, G&A $0.18, and fee $0.14. Your cost-only wrap (before fee) is 1.7x.
1 point of fringe moves the wrap 0.014x; 1 point of overhead moves it 0.016x
Because the rates compound, a point of fringe costs about $9,348 a year in price on this bid. Fringe is usually the largest and most controllable pool for services firms.
Bid price $1,233,908 on 13,440 hours
Blended direct rate $50/hr becomes a $91.81/hr fully burdened billing rate, with $91,401 of fee.
Next actions
- Use your headroom selectively: hold the wrap on price-sensitive bids and add fee on FFP work where you carry more risk.
- Recalculate provisional indirect rates quarterly from actuals and true them up; a rate that drifts above your bid assumptions erodes fee on every cost-type contract.
- Have your indirect rate structure and accounting system reviewed for DCAA-style adequacy before bidding cost-reimbursable work.
- Run price-to-win on your top 3 pursuits by checking awarded rates and public schedule pricing for comparable labor categories.
Model assumptions & limitations
- Wrap rate = (1 + fringe)(1 + overhead)(1 + G&A)(1 + fee). Assumes overhead is applied to direct labor plus fringe and G&A to total cost input; adjust if your disclosed allocation bases differ.
- All direct costs on the bid are labor; travel, materials, and subcontracts would carry G&A (and possibly material handling) but not fringe or overhead.
- The competitive ceiling is your own estimate. Typical service-contractor wrap rates vary widely by agency, location, and on-site vs. off-site work; verify against your win/loss data.
- Fee ranges noted in help text are rules of thumb; regulatory fee limits apply to some cost-type contracts.