In the United States of America, the Vector Company is one of the leading in manufacturing of drone technologies. The firm has specialized in the production of wireless technologies which has been in operation for the last past twenty-five years, and today it continues with the manufacturing of the network solution for its clients. Besides the firm equality gives the unified network alongside collaborations within the market which has ensured the critical performance is enhanced. Further, as a result of its many years of experience in the area of the drone production alongside other data communication invention, it may be in the position to win the proposed nation's contract.
Apart from the Vector firm other organization that will be competing for the government award of the contract is the Intel which has specialized in the field of computer technologies. The Intel Company of the recent years it has also started the production of the drones on a larger scale basis. The Intel organization has been leading from the front in the manufacturing of the drone whereby it has been in the position to realize more than a hundred drones to the sky to break the Guinness world record for having the highest number of drone in the atmosphere. Further, the firm has pumped more than $ 300 million towards its technologies based undertakings which have been critical towards the expansion of the drone services in any part of the world. This undertaking provides an essential duty for the creation of its outlets around the global. Also, the firm has channeled a lot of its resources towards the achievement of the worker's diversity. The undertakings in diversity have been vital factors towards the attraction of most talented personalities in the firm. The strategy of workers diversity has facilitated its operations with the company alongside the promotion of information security and invention with the US (Chandler, 2015).
Contracts awarded
The Intel alongside its competitor's Cray in the year 2015 it was awarded a $ 200 million contract by the government to manufacture a supercomputer. The firm was mandated with the formulation of the Xeon Phi processors and also the production of computer technologies that could be applied in the manufacture of the supercomputer for the federal state. The supercomputer is expected to be five more times powerful than the current system that is in place. In the regard the contract was given out by the department of energy whereby the Intel is expected to apply its high-level computing mechanism in the previous contract, which led to the generation of the Shasta which is a combination of the Intel's new technology alongside the Cray supercomputing system.
Besides, the firm was given the tender which was based on its high technological growth in the industry of computer. In this regard, the company will be in the position to the producer the supercomputer based on its success in the drone system generation. For many past years, the Intel organization has been well understood for its international brand which gives it an upper hand in getting the tender by the federal government compared to other applicants.
Beside the Intel firm, the Vector organization was awarded the tender with the helicopter transport service of Canada. The Vectors cooperation has experience of more than 15 years in overhaul, repairs as well as the maintenance in the aviation industry. The Vector Company signed a two-year contract in the production of these services with the HTS Canada. The basic logic behind the winning of the agreement was its long experience in the production of these types of services as well as being in a position to give the specific needed services (Chandler, 2015).
Types of contracts
Further because of the experience of the Vector and the Intel organization the two are in the position of winning various forms of government tenders from the department of defense which is planning to give out a $ 400000 government tenders. The first type of contract is known as the fixed price whereby the price of the whole work is assessed, and the firm or the person that provided such a tender is performed. In this regard if the contract is not done as per the guidelines such firm or person is not paid out, but if the job is carried out as planned then the contracting players must give out the payment as documented in the deal. Beside because of the experience of the two firms they are in the position to determine the cost that will be involved alongside the expected profits. This means that the companies are in the place to make estimates of the value and benefits hence undertaking a fixed price payment method will be necessary for the firm (Chandler, 2015).
The second type of contracts is the cost reimbursements that rely on the actual expenditures. The cost reimbursement works in a manner whereby the contracting firm is required to meet the agreed cost alongside any other spending in the implementation of the project which usually works well for the profit-driven firms. In the regard undertaking, the cost reimbursement methodology will work well for the Intel organization which has been fundamental towards the production of the government supercomputer. This assumption is made based on the understanding that having such a computer which is mainly research-based and making estimation of the actual cost it will undertake is more than impossible. Further there are different advantages that are associated with the cost reimbursement approach when it comes to the payment terms. For any firm that offers services based on the cost reimbursement tender have the right to access the down payment before the being the actual work. On the hand, some of the demerits of such contracts are whereby a project change to performance-based pay leads to inconvenience in a situation whereby the contractor does not have enough finances but has the equipment and the know-how of the job. Beside in cases whereby the contracting office declines the performance-based pay to other different payment approaches, it would hinder the state from this pay methodology. For example, it will inhibit the nation the chance to pay only for the services that are given out.
Also, before any contracting officer makes changes on pay on behalf of the nation there are some requirement that is supposed to be met, the contracting officer is required to communicate to the contractor in writing of these changes. Further, the reforms that have been undertaking are supposed to go in line with guidelines of the contract and are supposed to be within the resource, time and signed by the government and the contractor. In this regard when the agreements provide the notice outlining the changes as an outcome to changes in financial or prices resources essential for successful undertaking of the project, the contracting officer is required to make an adjustment in regard to factors such as delivery and cost of the project that has as a result being affected by these changes.
In most case most of the federal contracts are subject to changes that put the contracting officer in power to perform out unilateral changes in the field that are designated within the agreement, whereby if the changes that are made result in cost increment or period extension such contractors are not obliged to perform which requires the contracting officer to put a signature to these changes manually. But it should be understood that such orders changes are not the best means of making contractual changes as they inconveniences the contractors which forces them to go back to the drawing board — another disadvantage of the requirement its whereby it increases the uncertainties to the contractor when searching for the government contracts among the investors.
Direct costs
Direct cost can be defined as the cost of materials as expenses and labor applied in the production of a product. For example, the Vector firm uses labor costs to make payment to its specialized individuals in the production of it is drone system. The dedicated personnel refer to highly trained people in drone, and the computer invention and the labor rendered out accumulates in form of payment of wages. Further, the second direct cost at a firm meets are the materials which comprise of the rare earth metals that are applied in the making of computers alongside other support materials. Above all the organization also has to undertake other expenses when it comes to products like the commission paid to the agent who assists in the procurement of the materials alongside the sales (Khan, & Jain, 2010).
On the other side, the Intel Company also meets expenses such as materials and labor costs other expenses comprise of thighs like meals to the employees during the period of production whereby the price of this kind of meals is direct in connection with the level of output. In this regard, the Intel cooperation should win the tender because most of its direct cost are in relation with the actual production as compared to the Vector company that in the long run, used a lot of finance meeting the considerable cost of the non-production commission to employees. When it comes to the asset turnover Vector firm has 0.2 compared to the higher turnover of Intel which is 0.9 which primarily illustrates that Intel stand in a good chance of using minimal resources to meet the goals of the project.
Indirect cost
In the regard the indirect cost can be defined as the price which is not directly attached to production alongside other activities whereby both Intel and Vector experience incurs. Indirect expenses are also referred to as overhead costs. Besides this cost comprise of maintenance of the operating kind of machinery, rent for premises and payments of utilities. The indirect cost makes sure that a firm has enough resources for production. With time the indirect costs in most firms have gone up which include wages and salaries, rent, and utilities. For example, the Vector firm has workers at every stage of drone production which makes the company meet a tremendous amount of cost that goes to wages on a monthly basis which is similar to the Intel firm. Apart from this cost, the Vector firm meets other utility costs such as the internet, telephone, electricity, and water. The Vector Company is located on a great premise which means that it pays a significant amount of the utility bills. Beside these both the organization are massive and they have lawyers who are responsible with the legal matters of the firm as well as advising on best legal policy to adopt. Based on the understanding of the indirect cost each of the firms stands a better chance to be awarded the contract (Khan, & Jain, 2010).
Recommended company
From the detailed analysis, Intel Company stands a better chance of winning the tender, for example, it has a higher asset turnover rate compared to Vector Company. This implies that it is an excellent position to make use of the $ 400000 and a more efficient and effective manner. Another reason for picking Intel organization is because of it pasted success in the manufacturing drones of recent it demonstrated one hundred drone patterns in the sky to show it is invention supremacy. Having such history put the company in a strong position for rendering drone to the department of defense. In summary, the Intel has been in a position to win most of the federal government projects, and it should be awarded the contract.
Reference
Baumers, M., Dickens, P., Tuck, C., & Hague, R. (2016). The cost of additive manufacturing: machine productivity, economies of scale and technology-push. Technological forecasting and social change, 102, 193-201.
Chandler, A. (2015). Law of contract. New York: McGraw Hills
Khan, M. Y., & Jain, P. K. (2010). Management accounting: Text, problems and cases. New Delhi: Tata McGraw Hill Education Private Ltd.
Poole, J. (2014). Textbook on contract law. Oxford: Oxford University Press.
