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Table of Contents
Technology is always advancing to ease human work. Machines have been developed in industries to reduce the human workforce whereas in the health care sector, they aimed to improve the quality of services provided to patients. Drones have also been invented to be utilized by organizations and the government for various purposes. They have been used in the military to lead attacks and provide real-time location of an enemy during war. The utilization of drones by the government is becoming rather extensive so that the authorities have sought various contractors who can develop the best technology to suit their purposes. Intel and Vector Cal are companies that have been in service in the sector of drones, utilizing resources, incurring costs and acquiring government contracts in the surveillance innovation.
Companies’ Overview
Vector Cal is one of the companies that have been in service in the United States for many years manufacturing drones for government use. The organization utilizes wireless technology to provide network services and solutions to its customers (Byman, 2013). The navigation system of this innovation was meant to be used by drones and the stealth drone aircrafts. The organization has focused on unified collaborations, communication and relations within the industry. Apparently, this has been an important factor since it has ensured that improvements are enhanced in the performance sector. This company has vast experience in the drone industry among other technologies in which it has invested. Due to Vector Cal’s impressive technological history, it is eligible to compete for the 400 thousand dollars government contract.
The other company that possesses the necessary expertise and experience to vie for this contract is Intel. Intel Company has been investing in technology for a long time. Recently, the organization expanded its venture into the drone processing market. The company has occupied a leading position among other organizations having released many drones into the sky in patterns to beat the Guinness World Record. Moreover, to advance its venture in relation to innovations, the company recently invested 300 million dollars to support its technology-based operations (Shuster, 2016). Consequently, this will help to expand its market in the world since it aims to serve more customers. The company is also interested and supports workforce diversity by inviting and maintaining the most talented employees. Importantly, this has promoted a significant improvement in its operations and in the promotion of information technology and security in America. Therefore, the technological history and previous success of Intel made the company eligible to take part in the competition to win the government contract.
Awarded Contracts
Intel was awarded a 200 million dollars contract to develop a super computer in 2015, partnering with its competitor Cray and other companies (Shuster, 2016). The companies were tasked with devising super processors, namely Xeon Phi processors, and other computer parts in the development of the super computer that will be utilized by the federal government. This system is meant to be faster than any existing nowadays by more than 5 times. Therefore, the company is expected to deliver its best experience by utilizing its technology as the core factor in this contract. As a result, Shasta, which is a combination of Intel, Cray and other companies’ technology, is expected to be a powerful one-of-a-kind system. The reason why the contract should be awarded to Intel is in its well-known high technological advancement (Shuster, 2016). In fact, due to this, Intel has been granted the position among the top companies in the computing industry. The organization also had substantial success in its drone technology and computer systems; thus, it is expected to devise a super computer of the highest quality. Furthermore, the company has dominated the international market competitively giving it the added advantage.
Vector Cal has also had significant contracts in the technology industry. This company signed a contract with Canada regarding the helicopter service sector. In the aviation industry, the organization has more than 15 years of experience, and this puts it in a better position to compete for the contract. The 2-year contract is aimed at advancing the HTS of Canada. Thus, the ability of Vector Cal to deliver services in the aviation sector for a long time is the main reason why this company acquired the contract.
Types of Contract
Vector Cal and Intel may qualify for different types of contract. A fixed-price contract is associated with those contracts whereby the general costs of a contract are assessed and fixed, and the firm responsible for executing the contract begins working (Poole, 2014). Payment in this type of a contract occurs only if a contract is executed according to the specified and agreed terms. Considering Vector Cal, this type of contract will be the most appropriate. Vector Cal has been in that line of business for long; thus, it would be easy for it to assess the costs that will be incurred as well as the expected profits. Accordingly, this implies that the company can determine the required funds and the costs that it would receive, thereby making a fixed-price contract the most suitable and relevant one.
Cost reimbursement contract is a type of contract that is calculated and paid according to the expenditures (Poole, 2014). Accordingly, this is done by calculating the funds related to the achievement of the purposes of the contract and an addition of the agreed profit. In fact, talking about Intel Company, this contract type is the most appropriate for it. For instance, Intel is developing a super computer for the federal government so that it is reasonable that the contract costs are calculated after its finalization to ensure that all costs are covered. This contract is appropriate for those companies whose costs cannot be estimated the same as in this case, meaning that it will almost be impossible to determine the actual costs in advance for the development of the product.
Incurred Costs
Direct Costs
The expenses that were involved in the purchase of labor or materials directly involved in the process are perceived as direct costs. In the production of drones in the navigation process, Vector Cal incurred costs such as funds spent on the acquisition of specialized personnel. In fact, these are highly talented and experienced individuals who facilitated the whole process of drone system development and maintenance. The company also spent funds on paying wages to the responsible parties. Another direct cost incurred by the organization was the expenses involved in the purchase of materials. Materials, including earth metals and other support materials, were required in the development of the drones. Furthermore, the organization had to pay the individuals who were responsible for availing the required materials. Intel Company equally incurs direct costs in the purchase of materials and provision of payment for labor for the development of the drones. Another direct cost that is incurred by both companies is the funds spent on the purchase of meals for the employees of the organization.
Indirect Costs
Indirect costs are defined as expenses involved in navigation process but not directly attributed to the product manufacturing. Importantly, these costs cannot be traced to individual objects or products, department or activities. Both companies, Vector and Intel, incurred similar indirect costs in the production of the drone navigation systems. The costs included the payment of utilities, maintenance of machines, insurance costs and money spent on renting premises. Thus, indirect costs ensure that an organization has sufficient resources in the production process.
Indirect and direct costs play a significant role since they influence the choice of a company to be granted the contract. By analyzing the direct and indirect costs of an organization, one can determine the company with high asset turnover. The higher is the asset turnover, the higher is the chance of a company to win a contract since it signifies a lower cost of production. Intel Company has shown an asset turnover of 0.9 compared to that of Vector Cal which is 0.2 (Shuster, 2016). Therefore, it means that the company utilizes fewer resources in the production.
Recommended Company
From the above analysis and presentation, the company to be recommended is Intel. The company has evident high asset turnover ratio compared to its competitor Vector Cal. Accordingly, this means that it will utilize the 400 thousand dollars awarded by the government in a more appropriate manner. Secondly, the organization has a success record in the drones sector (Byman, 2013). It recently released one hundred drones into the sky in a pattern to showcase its technological capability. This organizational history makes it more appropriate to be selected in the delivery of the government drones. Lastly, Intel Company has previously secured major contracts with the US government, meaning that the government knows the capabilities of this company. Thus, it would be sensible to select Intel as the most suitable company.
Conclusion
Drones have made surveillance much easier in today’s world. Most governments have utilized them for this purpose in the defense departments. Intel and Vector Cal are two companies that have invested greatly in the world of technology. The two companies at some point gained success having signed major government contracts. Intel together with Cray Company is working to invent a super computer, whereas Vector Cal acquired a contract with the HTS of Canada. These companies have held top positions in the technology market, making it easy for them to acquire the government contracts. The companies are eligible for different contract types, and they have both incurred direct and indirect costs as they worked on different technological advancements. The government contract of 400 thousand dollars is likely to be acquired by Intel Company since it has the added advantage of having a history of a high asset turnover. Thus, it will be the recommended company for the government contract.
