Wrap Rate Calculator
Underpricing a wrap rate wins the bid and loses the contract; overpricing it loses the bid before technical evaluation ever happens. Getting the build-up right, and being able to defend each layer, matters as much as the final number.
- What it does
- Build a defensible fully-burdened labor rate from direct labor, fringe, overhead, G&A, and fee.
- What you need
- Direct labor rate, fringe percentage, overhead rate, G&A rate, and target fee
- What you get
- A fully burdened wrap rate per labor category, ready to load into your price proposal
- Cost
- Free
Key takeaways
- Built for federal bidders, not generic business planning.
- Use the output as a starting point, then validate against the actual solicitation.
- Save results into your Company Brain so future drafts reuse them automatically.
- Works alongside RFP Scribe's $2 single-draft option for a full first response.
How it works
Enter a labor category's direct hourly rate, then layer in fringe benefits, overhead applied to labor plus fringe, general and administrative expense applied to the total cost base, and your target fee percentage. The calculator shows the fully burdened rate and each layer's dollar contribution so you can see where the rate is coming from.
Why it matters
Contracting officers and cost analysts scrutinize wrap rates during price realism review, and an indirect rate structure you can't explain invites a downward price adjustment or a competitive range exclusion. A transparent build-up also helps you negotiate rates with teaming partners.
Tips for better results
Base your indirect rates on your actual accounting pools rather than industry averages whenever you have DCAA-approved or audited rates, and keep a documented build-up file for every labor category you propose so you can answer rate questions during discussions.
FAQ
What is a typical wrap rate multiplier?
Commonly 2.0 to 3.0 times direct labor cost, though it varies widely by company size and contract type.
Do I need DCAA-approved rates to bid?
Not for FFP contracts generally, but cost-reimbursable and some negotiated contracts expect an approved or auditable rate structure.
Can fee vary by labor category?
Yes, though many contractors apply a single blended fee rate across all categories for simplicity.
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