ONE OVERHEAD RATE FOR ALL WORK IS COSTING YOU ON EVERY PW BID.
Civil contractors doing both DOT or municipal prevailing wage work and private work need two overhead rates. Prevailing wage work requires fringe benefit payments, $12 to $20/hour on federal work for operators and laborers, that private work doesn't have. A blended overhead rate underprices prevailing wage work by the fringe benefit difference on every public bid. SPM calculates separate overhead rates for prevailing wage and private work at engagement start.
The math is easy to miss because the base wage is the number everybody quotes. An operator at $38 an hour is an operator at $38 an hour, right up until the wage determination adds health and welfare, pension, and training fund contributions on top. Now the same operator costs $52 to $56 an hour, and the overhead rate you built on the $38 base is spreading SG&A across a labor cost base that no longer exists. So the public bid goes out light by the fringe difference, every single time, and the private work ends up covering the shortfall.
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WHAT IT MEANS.
A prevailing wage overhead rate is an overhead rate calculated on the prevailing wage labor cost base with fringe benefits included, so public work takes on its own share of SG&A instead of borrowing the private work rate.
Prevailing wage civil work has a higher labor burden than private work, because fringe benefits are added on top of base wages. Bidding both at the same overhead rate underprices one of them every time. The one that gets underpriced is almost always the public work, because the blended rate was built mostly on the lower private labor cost base.
WHERE THE PUBLIC BID GOES LIGHT.
Fringe benefits inflate labor cost on PW work
A heavy equipment operator at $38/hour base wage on federal prevailing wage work requires $14 to $18/hour in fringe benefits on top, covering health insurance, pension, and training fund contributions mandated by the wage determination. Your private work overhead rate was calculated using $38/hour as the labor cost base. On prevailing wage work the real cost is $52 to $56/hour.
Classification errors create back wage liability
Civil prevailing wage work uses operator, laborer, and carpenter classifications at different rates. Using a laborer rate for an operator, or failing to pay the correct fringe for each classification, creates back wage liability equal to the underpayment. Civil contractors with large DOT projects have received six figure back wage assessments from classification errors that went undetected for months.
One overhead rate applied to both work types
A contractor bidding a $2M private site development job and a $2M DOT highway project at the same overhead rate is pricing one of them incorrectly. Prevailing wage work has the higher labor burden, so the rate that correctly covers overhead on private work understates what's needed to cover the same overhead on prevailing wage work at the higher labor cost base. The public bid is the one that comes in short.
WHAT IT LOOKS LIKE IN DOLLARS.
A $38/hour base wage plus $14 to $18/hour of mandated fringe puts a heavy equipment operator at $52 to $56/hour on federal prevailing wage work. The overhead rate built on the $38 base spreads SG&A across a labor cost base well below the one the job uses.
A verified civil client at $6.7M revenue took roughly 40% of revenue from DOT and municipal prevailing wage work while using a single blended overhead rate across all bids. Separating the overhead calculation by work type showed the prevailing wage rate was 4 points higher than the private work rate, which means every DOT bid had been underpriced. Within 60 days of the correction the line of credit went from $348,000 to $0, and $65,000 of employee bonuses were paid.
TWO RATES, NOT ONE.
The private work overhead rate is SG&A divided by private work revenue. The prevailing wage overhead rate is SG&A divided by prevailing wage revenue, calculated on the prevailing wage labor cost base with fringe included. The difference between the two rates is the additional overhead burden added per dollar of prevailing wage labor.
Prevailing wage rates change. Federal Davis-Bacon rates get updated periodically, and state DOT prevailing wages update on their own schedules. Bidding with a rate that was current 18 months ago and has since increased puts the wrong labor cost in the bid, so pull the current determination from SAM.gov for federal work, or from the applicable state agency for state work, before every prevailing wage bid.
Certified payroll for civil work is submitted weekly, and each submission certifies that every worker was paid the correct prevailing rate for their classification. SPM builds the classification structure in ControlQore so certified payroll comes out of time entry data instead of being assembled manually. The weekly submission then takes 15 to 20 minutes to review and file rather than 2 to 3 hours of manual assembly.
Prevailing wage projects get tagged in ControlQore with the applicable wage determination, and cost reports separate PW and private work margins. After six months you can see whether PW work is as profitable as private work at current pricing, or whether the difference between the two overhead rates has been compressing margin on public projects the whole time.
FLAT MONTHLY FEE. NO SURPRISES.
Three tiers, priced by your trailing twelve month revenue. Which one you're in depends on how much of the work you want off your desk. No hourly billing. No payroll. The one-time onboarding fee is right here in the table.
Built for subs doing $1M to $12M. Above $12.5M we quote.
| Last 12 months revenue | Core | Strategic | Platinum | One-time onboarding |
|---|---|---|---|---|
| Under $1M | $1,900 | $3,100 | $3,300 | $2,500 |
| $1M to $3.5M | $2,600 | $4,100 | $5,300 | $4,500 |
| $3.5M to $6.5M | $3,800 | $5,900 | $8,300 | $6,000 |
| $6.5M to $9.5M | $5,100 | $7,600 | $11,800 | $7,500 |
| $9.5M to $12.5M | $6,100 | $8,900 | $14,900 | $9,000 |
| Above $12.5M | Quoted | Quoted | Quoted | Quoted |
The onboarding fee covers migrating your books back to the start of your last taxable year and getting you fully operational in 60 days. It's billed once, with your first invoice. It's the same for all three tiers, and it moves with your revenue band. Your first month is prorated, and your monthly engagement starts on the first of the first full month.
Just want the setup? Onboarding only is the same onboarding work with no monthly service after it, one time, at the onboarding fee plus $2,000. Start a monthly engagement later and $2,000 counts toward it. It starts at $4,500, and the price for every band is on the pricing page.
The three tier columns are the whole price. Which one fits depends on how much of the work you want off your desk. No payroll. No hidden line items. The onboarding fee is right here in the table.
- Online software only: QuickBooks, Sage, Viewpoint and similar. No VPN or hosted desktop.
- Not in any tier: payroll, pay applications, collections on receivables.
- Pricing valid through 2027.
CFO work. Your own bookkeeper keeps doing the books.
You stop guessing.
You get the CFO work. Job costing built against the way you estimate, a 13 week cash forecast, monthly WIP, and a meeting every month that ends in decisions and never in a report.
Your bookkeeper still does the books.
Core, plus bookkeeping and bank reconciliations, plus job costing and WIP software set up and managed for you. Use your own online accounting software or we supply it, one price.
Every job shows its margin while it is still open.
Everything in Core, plus the bookkeeping and bank reconciliations done for you, and the job costing and WIP software set up, loaded with your cost codes, and managed every month. Use your own online software, or move to ours and we cover it.
A bookkeeper we choose does the books and reconciliations. No payroll.
Strategic, plus a controller who handles payables and receivables the way an in-house controller would. You approve every payment.
You approve, and the money side gets handled.
Everything in Strategic, plus a controller we choose who handles your bills and receivables for you the way an in-house controller would. They call vendors, pay the bills and keep the accounting current. We plan the cash flow first, and you approve every payment because it is your money.
A controller we choose does the payables and receivables. No payroll, no pay applications, no collections.
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