The Wind2 Software survey presents a wide range of useful information: comparison of data for each year from 1978-2004, profit and loss statements, key financial ratios (e.g. current ratio, average collection periods), identification of key overhead cost elements (e.g. all fringe benefits, insurance, indirect labor, depreciation, marketing costs etc.), key measures of productivity, and other financial measures (e.g. work-in-process incurred but not billed, number of firms that charge interest on late accounts). The following table and explanations represents a selection of measurements for 2004 we chose that will provide interesting comparisons for our government contractor readers. For those who (like us) forget statistics terms, "mean" refers to an average while "median" refers to a midpoint.

1. Net Profit on Total Revenue before Tax and Distribution. Total revenue includes revenue generated from in-house labor (representing 85-90% of total revenue) as well as consultants or subcontractors and billable reimburseable expenses. Before distribution is before bonuses and profit distribution – since these items vary widely, the survey compares results before and after such distributions.

2. Net Profit on Net Revenue Before Tax Distribution. Net revenue refers to revenue generated only by employees and may be more relevant for firms having unusually high outside consultants and/or large reimburseable expenses.

3. Contribution Rate. This measures the portion of each dollar of net revenue remaining after all direct project costs (both labor and expenses) are covered.

4. Overhead Rate (before distribution). This is the percentage of total office overhead to direct labor. What the survey calls "office overhead" is really what many contractors call overhead and G&A including the portion of employees labor not direct charged to projects. Adjustments for unallowable costs are addressed below.

5. Overhead Rate (after distribution). Same as above but the overhead includes bonuses, employee profit sharing and other distributions but not distribution of profit.

6. Net Multiplier. This is the effective multiplier achieved on direct labor and is calculated by dividing net revenue by direct labor. Consultants and reimburseables are excluded in order to determine an actual multiplier achieved by the firm’s own efforts. The figure indicates participating firms received $2.91 for each $1.00 of direct labor spent.

7. Unallowable Overhead as a Percentage of Direct Labor. This consists of total overhead that contractors either voluntarily delete or government auditors disallow as a percentage of direct labor.

8. Unallowable Overhead as a Percent of Total Overhead Before and After Distributions. Looking at unallowable costs from a different vantage.

9. Net Revenue for Total Staff. This rough productivity index measures net revenue for each employee or part-time equivalent. It is calculated by dividing net revenue by average total staff, including principles and part time equivalents.

10. Net revenue Per Technical Staff. This is probably more relevant because it measures revenue by those directly responsible for generating it.

11. Chargeable Ratio. Measures the percent of total staff time charged to projects (whether billed or not) and is calculated by dividing total direct labor by total firm labor (direct labor plus indirect labor, vacation, sick leave and holidays actually paid).

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