- In this model, the fee is based on the desired scope of services and the total estimated hours to complete the tasks.
- Multiply the estimated hours by the profit plan average direct labor rate to get the total direct labor for the project.
- Multiply the direct labor times the overhead rate to determine the overhead budget for the project.
- Multiply the direct labor times the profit plan profit multiplier to calculate the profit.
- Add direct labor plus overhead plus profit to get net fee.
- Add direct consultant lump sum fee and other estimated direct expense to the net fee.
- Make an estimate for contingencies to add to the fee.