The SERVVIAN® Financial Intelligence Glossary defines key financial, estimating, and GovCon cost structure terms used in labor-intensive businesses. It is designed for contractors, estimators, and decision-makers who need clarity on concepts like breakeven rates, indirect costs, G&A, and forecasting frameworks used within SERVVIAN® and FALIB®. Use this glossary to better understand how cost components connect to real-world estimating, pricing strategy, and profit protection.
Use the search below to quickly find definitions and understand how these terms connect to real-world estimating, pricing, and financial decision-making.
FALIB® is SERVVIAN’s financial intelligence system for analyzing labor-intensive businesses through forecast-driven cost structure, revenue alignment, and breakeven discipline.
FALIB-Mr means Master Report. It is designed for companies operating with a SOLD labor revenue stream only.
This makes it especially relevant for businesses that primarily generate revenue from their own sold labor and may be partially paying Davis-Bacon wages or other prevailing wage obligations.
FALIB-Mr can help identify the ripple impact of fringe shortfalls across the labor cost structure.
FALIB-Sr means Senior Report. It is built for businesses that operate with both SOLD labor and Pass-Thru support revenue streams, or for firms that need visibility into a hybrid model.
This makes FALIB-Sr a strong fit for businesses such as general contractors that may carry a blend of direct sold labor and pass-thru support activity.
Hybrid companies may require separate breakeven hourly rates for SOLD labor and Pass-Thru support labor.
FALIB-Jr means Job Report. It can only be produced after completing either FALIB-Mr or FALIB-Sr first and then carrying that forecast analysis into a specific estimate.
Once a company completes its master or senior report structure and then finishes an estimate for a job to be bid, FALIB-Jr translates that higher-level forecast intelligence into a job-facing report.
The Net Rate, sometimes referred to as the raw rate, is the true labor-related multiplier that must be understood in order to budget payroll cost correctly within the forecast structure.
Companies that do not clearly understand their net rate can misread actual labor exposure and create pricing distortion that later shows up as margin leakage or undercovered labor assumptions.
The Raw Rate is another way of referring to the Net Rate. In SERVVIAN® language, this should be treated as the same core concept unless you are intentionally distinguishing terminology for audience clarity.
Because this rate influences labor budgeting and breakeven support, it plays a major role in how forecast analysis should be interpreted before pricing and profit are layered into the final estimate.
The Breakeven Rate is the rate that covers everything up to the point of breakeven. It is not profit.
For some hybrid companies with two revenue streams, there may need to be one breakeven hourly rate for SOLD labor and another for Pass-Thru support labor.
Profit is then layered above those rates only after the breakeven structure is fully supported.
In GovCon environments, one of the most important disciplines is ensuring that cost components are fully covered without being counted twice.
FALIB-Mr and FALIB-Sr help structure the underlying breakeven rates, while FALIB-Jr carries that logic into the job-level estimate.
Together, these reports support a cleaner breakdown that helps ensure all required elements are covered while avoiding duplication inside the rate structure.
SOLD Labor Revenue refers to revenue earned directly from labor sold by the company. Pass-Thru support revenue refers to support-related activity that may require its own treatment within the pricing model.
Understanding which revenue stream is present matters because it affects whether a company is better aligned to FALIB-Mr, FALIB-Sr, or a hybrid framework that requires multiple breakeven paths before profit is applied.
Total Cost Input (TCI) is a cost allocation base used in government contracting to apply indirect rates across the full cost structure of a project or organization.
Under TCI, indirect costs such as overhead and G&A are applied to the total cost base, including direct labor, materials, and other allowable costs.
This method provides a comprehensive view of how indirect expenses are distributed across all cost elements, making it a common approach in GovCon pricing and compliance environments.
The G&A Rate represents the allocation of General and Administrative (G&A) costs across a company’s cost base.
These costs include executive management, accounting, legal, HR, and other business-wide expenses that support overall operations but are not tied to a specific project.
In GovCon, the G&A rate is applied using allocation bases such as Total Cost Input (TCI), Value-Added Base (VAB), or Single-Element structures.
The Hourly Sell Rate is the rate charged to the customer for labor and is built on top of the breakeven rate.
It includes all labor-related costs, indirect expenses, and adds profit margin on top of the fully supported breakeven structure.
If the sell rate is set too low, it can result in undercovered costs. If set correctly, it ensures that all obligations are met before profit is realized.
The Value-Added Base (VAB) is a cost allocation method that applies indirect rates to a reduced cost base by excluding certain pass-through costs.
Typically, subcontractor costs and materials are removed from the base, so indirect rates are applied only to value-added activities such as labor and internal operations.
This method is often used in GovCon to prevent distortion of indirect rates when large pass-through costs are present.
Direct Labor refers to wages and salaries paid to employees performing revenue-generating work tied directly to a job or project.
This includes base pay, overtime, and differential rates, forming the core labor cost used in estimating and pricing.
Adjusted Wages reflect increases required to meet prevailing wage obligations such as Davis-Bacon.
A Fringe Shortfall occurs when required fringe benefits are not fully covered, creating additional cost exposure that impacts total labor burden.
Burden & Fringe includes all employer-paid labor costs beyond wages, such as FICA, Medicare, workers’ compensation, PTO, health benefits, and retirement contributions.
These costs must be applied correctly to labor to ensure accurate breakeven and pricing models.
Indirect Labor includes wages and salaries not directly tied to a specific job, such as administrative, clerical, and office personnel.
These costs are typically allocated through overhead or indirect rate structures.
Operations Costs include ongoing business expenses such as rent, software, fuel, insurance, and utilities required to run the company.
These costs drive overhead and must be properly included in forecasting and rate development.
Indirect Rates are calculated percentages used to allocate indirect costs across labor or total cost bases.
Common examples include Overhead (OH), G&A, IR&D, and B&P, which support pricing, forecasting, and compliance.
Pass-Through Costs include expenses such as subcontractors, materials, equipment, and travel that are billed through to the client.
These costs may carry markup but require careful treatment to avoid distortion in rate calculations.
Ripple Impact refers to secondary increases in labor costs that occur when base wages are adjusted, such as under prevailing wage requirements.
These increases affect burden, fringe, and total cost structure, and are often missed in traditional estimating models.
Allowable Costs are expenses permitted under contract or regulatory guidelines, while Unallowable Costs cannot be included in certain cost structures.
Proper classification ensures compliance, accurate rate development, and defensible pricing.
Surface Preparation is the work required to clean, strip, sand, blast, repair, or otherwise prepare a surface before a coating system is applied.
In coating estimation, surface preparation is often one of the largest labor drivers because actual field conditions can greatly change production time.
A Production Rate is the amount of work completed in a given period of time, such as square feet per hour or units per labor hour.
In estimating, production rates are used to convert work scope into labor hours. Historical production timing can be used as a starting point, then adjusted for job-specific conditions.
Dry Film Thickness (DFT) is the thickness of a coating after it has dried and cured.
DFT is checked to confirm that the correct coating system was applied and that the surface has the required level of protection without excess build.
A DFT Gauge is the tool used to measure dry film thickness on a coated surface.
Estimators should account for the time required to perform these checks because coating thickness verification is part of labor, not just quality control.
A Micrometer Check is a precision thickness verification step used to confirm coating build and surface compliance.
In aerospace coating work, these checks help verify that the substrate and finished system meet required thickness targets.
A Coating System is the full set of coating layers used together, such as primer, intermediate coat, and topcoat.
The estimate must reflect not only the material used but also the labor, cure time, inspection, and preparation required for the full system.
Coating Application is the process of placing the coating material on the prepared surface using spray, roller, brush, or other approved methods.
Application speed changes based on method, surface shape, environment, and finish requirements.
Rework is labor and material spent correcting work that did not meet requirements the first time.
In coating work, rework may include sanding, re-cleaning, re-blasting, recoating, or repeating inspection steps.
Cost Structure is the way labor, burden, overhead, indirect rates, pass-through components, and other business costs are organized inside a pricing model.
A strong cost structure helps estimators understand where breakeven ends and profit begins.
A Production Assembly is a structured estimating component that combines labor logic, materials, and pricing assumptions into one repeatable assembly.
In BreakEven+™, teams can use historical production timing, material pricing, and markup by COGS, then adjust the assembly for unique job conditions.
Historical Production Rates are production assumptions based on past job performance.
These rates can be useful as a starting point, but they should still be adjusted for special conditions such as corrosion, access, compliance, or inspection intensity.
Real-Time Cost Intelligence means the ability to see current cost structure, labor impact, and pricing relationships inside the estimating platform without waiting for outside analysis.
This gives contractors more control because estimates can be updated as business conditions change.
Profit Visibility is the ability to clearly see where profit is added, how much is planned, and where net margin lands after cost structure and unallowables are considered.
Strong profit visibility makes pricing easier to explain and defend.
Markup is the amount added to cost to create a selling price. Margin is the percentage of the final selling price that remains as profit.
These are not the same. Confusing them can distort the estimate and create false confidence in pricing.
Cost of Goods Sold (COGS) includes the direct costs required to deliver the work, such as labor, materials, and other direct job inputs.
Some companies apply markup by COGS category so labor, materials, and pass-through items can be priced differently.
Pass-Through Components are cost items that move through the estimate and may carry a blended markup or separate pricing treatment.
These often include subcontracts, materials, equipment, travel, or other third-party cost elements.
Marine Corrosion is deterioration caused by saltwater exposure, moisture, and marine conditions.
In marine coating estimating, corrosion severity can greatly change prep time, abrasive use, and labor hours.
A Dry Dock is a controlled facility where a vessel is taken out of the water for inspection, maintenance, repair, or coating work.
Dry dock access can improve visibility, but it also adds facility cost, scheduling pressure, and time-sensitive production demands.
The Hull is the main outer body of a ship or vessel.
In marine coating work, the hull is one of the primary surfaces requiring corrosion protection, surface preparation, and coating system control.
An Aerospace Coating System is the approved combination of primers, intermediate layers, topcoats, and process steps used on aircraft surfaces.
These systems often require tight environmental control, thickness verification, and documented compliance.
Aircraft Surface Preparation includes stripping, sanding, masking, cleaning, and other steps needed to prepare aircraft surfaces for coating.
Prep quality directly affects coating bond, finish quality, and inspection outcome.
Non-Destructive Inspection (NDI) is a method used to identify cracks, corrosion, or damage without harming the part being inspected.
In aerospace environments, NDI can add important labor and schedule impact to coating estimates when hidden damage is suspected.
Stress Corrosion Cracking (SCC) is a form of material damage caused by the combination of stress and corrosion.
In aerospace work, SCC can change a simple coating job into a larger repair and inspection event.
Hangar Environmental Controls are the humidity, temperature, airflow, and containment conditions needed to support aerospace coating work.
These controls affect cure time, finish quality, bond performance, and daily production rate.
Labor Burden is the added cost on top of direct wages. It usually includes payroll taxes, workers’ compensation, benefits, paid time off, insurance, and other employer-paid labor costs.
Labor burden helps show the true cost of employing labor instead of looking at wages alone.
A Labor Cost Build-Up is the step-by-step process of building a labor rate from wages into a fully supported labor cost.
This build-up can include direct wages, labor burden, overhead, support costs, and other recoverable business structure before profit is added.
Estimate Structure is the way an estimate is organized so labor, materials, assemblies, burden, overhead, and profit can be seen clearly.
A strong estimate structure helps contractors price work in a consistent way and review estimates without losing track of how the final rate was formed.
A Material Assembly is a structured estimating component used to group materials, supplier pricing, and markup logic into one repeatable assembly.
Material assemblies can help teams manage pricing by cost category and keep material logic consistent across estimates.
Coating Cost Estimation is the process of calculating the labor, materials, preparation, equipment, and business cost required to complete coating work.
Good coating cost estimation depends on more than square footage. It also depends on surface condition, production rates, inspection, and environment.
Industrial Coating Estimating is the process of pricing coating work for plants, tanks, structural steel, equipment, piping, and other industrial environments.
It often requires close attention to access, safety rules, shutdown timing, production rates, and preparation needs.
Coating Project Cost Drivers are the main factors that increase or reduce the cost of a coating job.
Common cost drivers include surface preparation, corrosion severity, labor burden, production rates, access limits, inspection steps, environmental conditions, and rework risk.
A Production Assembly is a structured estimating component that combines labor logic, production assumptions, materials, and pricing inputs into one repeatable assembly.
In BreakEven+™, teams can use production assemblies with historical production rates, material pricing, and markup by COGS, then adjust them for special job conditions.