Know your real numbers — your indirect rates — before you touch a cost template or pricing worksheet. Solvability’s Wrap Rate Calculator and Rate & Pricing Model (RPM) give small GovCon businesses their fringe, overhead, and G&A rates, so every cost proposal is based on projected indirect rates, not rates pulled from old proposals.
Seven practices that matter
Derive rates from actuals
Benchmarks tell you whether you are unusual. They do not tell you what to charge. Only your ledger does that.
Layer indirects, never add them
Each pool applies to a different base. Adding percentages always understates the rate.
Price to the contract type
Fixed-price carries the cost risk on you. Cost-reimbursable shifts it. T&M sits between. The same work justifies different pricing under each.
Forward-price the period of performance
You are pricing next year, not last year. State every assumption you make about headcount, facilities and benefits.
Separate price-to-win from cost recovery
Know your floor before you look at the competition. If the competitive price is below your floor, the answer may be not to bid.
Be consistent across bids
Applying the same structure everywhere is more important than optimizing any single bid. Inconsistency is the red flag reviewers look for.
Document as you go
The build is worth as much as the number. A price you cannot reconstruct is a price you cannot defend.
The most common expensive mistakes
| Mistake | What it costs |
|---|---|
| Adding indirect percentages instead of layering | Systematically underbids every proposal |
| One blended wrap rate for on-site and off-site work | Overprices one, underprices the other, loses both ways over time |
| Pricing from an old rate set | Describes a company that no longer exists |
| Cutting the rate to win without checking the floor | Wins revenue that consumes cash |
| No documentation of assumptions | You cannot reproduce the number, so you cannot tell how wrong it is; unusable as a baseline next time |
above is really one practice: make sure the claim is true and you can show your working.
Check your floor
Run your real rates through the wrap rate calculation and compare it to what you are billing today.
Frequently asked questions
How do I price a fixed-price federal contract?
Start with your real wrap rate, not last year’s number, and build the price up from there. For a small federal contractor, pricing a fixed-price contract wrong means absorbing every unplanned cost yourself — once it’s signed, the government pays the agreed price no matter what your actual costs turn out to be. Use budgets and projections to estimate costs, including a management reserve, and make sure you’re bidding higher profit on fixed price to offset the additional risk you’re now carrying as the contractor.How much should a small business charge on a federal contract?
What you charge must cover your fully burdened cost — fringe, overhead, G&A — plus a reasonable fee, or you’re funding the contract out of your own pocket. Small federal contractors who guess at this number often underbid without realizing it, and once a price is submitted and accepted, it’s final — there’s no going back to renegotiate. Solvability’s Wrap Rate Calculator shows you that number, lets you adjust your pricing strategy, and gives you choices on fee before you submit the cost proposal.Fee is smaller than most people expect. A typical fee percentage on a federal contract runs about 6% to 12%. The trade in federal work is steady volume, not margin.