Lone Star Consulting Firm321 One Way Dr.San Antonio, Texas 78217

April 16, 2012

Alamo Research InstituteSan Antonio, Texas

Dear Alamo Research Institute,

Enclosed is the proposal for an Innovative Capabilities Audit.

As representatives of Lone Star Consulting Firm, we appreciate this opportunity to present to you our proposal for anInnovative Capabilities Audit. We recognize that Alamo Research Institute is one of the largest research &development organizations in San Antonio, Texas. We are honored to submit a proposal to assist you with increasingyour firm’s innovation, research & development, and overall quality. Based on the audit that we provide, we areconfident you will be pleased with our proposal.

Our firm consists of highly qualified individuals from a variety of backgrounds and experiences in all levels ofmanagement. Our expertise consists of data and financial analytics, information security and technology, mechanicalengineering, and audit. Additionally, our consulting firm has the background and experience necessary to follow adisciplined and strict time line. Our proposal presents detailed plans that can formulate the strategic managementcapacity, resource availability and allocation, capacity to understand technological environment and performcompetition analysis.

Please let us know if you would like to further discuss the details of our proposal and ask any questions regarding ourresponse.

Sincerely,

James Groh

Enrique Loera

Johan Lund

Sonok Rivetto

Scope Statement

The Innovative Capabilities Audit will accomplish the requirements specified by the Alamo Research Institute. Firstly,this audit will evaluate the strategic management capacity of ARI. The requirements include planning, executing, andevaluating the assessment of ARI management’s capacity to support innovation. Furthermore, it includes evaluationof the capacity for one management group to work with other levels of management groups including top, middle,and venture managers. The team will evaluate the strategic importance of the new incentives and how it lines upwith the overall ARI’s core capabilities.

Secondly, this audit will evaluate the resource availability and allocation. In order to accomplish this, an assessmentof the availability, strength, range of skills, and competencies of internal resources will be performed. A review ofresource spending and allocation along with activity tracking within different organization endeavors will also beexecuted. Additionally, an assessment of how corporate funding is utilized within ARI is to determine that funding isappropriately allocated. This analysis will help support strategic and tactical management planning for ARI’s potentialgrowth and efficiency of resource use.

Thirdly, the capacity to understand technological environments will be assessed. This assessment will include theability to understand the technological environment that ARI currently operates and the future technologicalenvironment it will operate in will be performed. ARI’s ability to assess and determine which technology or researchdepartment is their strongest and identifying technological opportunities for business units will be reviewed. ARI’scapacity for technological forecasting and forecasting impacts between technological areas will also be evaluated inorder to facilitate impeding external forces relevant to business units, research divisions, and opportunities.

Finally, an assessment of the firm’s ability to perform competition analyses will be performed. ARI’s past competitionanalyses will be collected and pertinent data will be extracted for analysis. The analytical methods employed by thefirm will be judged based on completeness, accuracy, and timeliness, with each variable evaluated on differentcriteria. The firm’s analysis of its primary competitor will be compared to an independent study conducted by LoneStar, which will investigate the competitor’s operations, marketing, finance, and corporate strategy. Finally, the firmwill be judged on its ability to anticipate external forces such as the entry of new competitors and macroeconomicforces.

A formal report will be submitted with summary of the results. ARI will be able to use the data provided to makeinformed decisions.

Work breakdown Structure

Management capacity tosupport new initiatives

1.0

Middle Management

1.2

New Venture Managers

1.3

Support for newinitiatives

(1.2a)

Corporate strategyframework for new

initiatives(1.2b)

Coach new venturemanagers

(1.2c)

Top Management

1.1

Build neworganizational

capabilities(1.3a)

Business Strategy fornew initiatives

(1.3b)

Long term corporateBusiness Strategy

(1.1a)

Strategic importance ofinitiatives

(1.1b)

Relate initiatives to corecapabilities

(1.1c)

Resource Availability andAllocation

(2.0)

Corporate FundingLevels Assessment

(2.1)

Breadth and Depth of SkillsAssessment

(2.2)

Research andDevelopment

Personnel(2.2a)

EngineeringPersonnel

(2.2b)

Market ResearchPersonnel

(2.2c)

Distinctive CompetenciesAssessment (2.3)

Distribution of Research andDevelopment Assessment

(2.4)

Current BusinessOperations

(2.4a)

Exploratory Research(2.4b)

New BusinessDefinitions & New

Business development(2.4c)

Capacity to PerformCompetition Analyses

4.0

Analytical Methods

4.2

Primary Competitor

4.3

External Forces

4.4

Accuracy(4.2a)

Completeness(4.2b)

Timeliness(4.2c)

Operations(4.3a)

Finance andStrategy

(4.3c)

Marketing(4.3b)

Data Collection

4.1

Understanding TechnologicalEnvironment

3.0

Determine Strength andInsufficiencies

3.1

Technological Forecasting

3.2

Technology Roadmaps

3.3

Financial Analysis3.1a

Previous Audit Results3.1b

Needs Analysis3.1c

Assessing Technologies3.2a

Identify Technologies3.2b

Evaluate PreliminaryPhase3.3a

Evaluate DevelopmentalPhase3.3b

Evaluate Follow up Activity3.3c

Work PackagesExample work packages were included showing the details of the work that will be performed. All workpackages can be provided upon request.

Project: InnovativeCapabilities Audit

Work Package (1.1a): Top Management Capabilities for long-term corporatedevelopment

Description: Evaluate topmanagement capacity todefine long-term corporatedevelopment strategy

Deliverables: Results of available capacity for top management

Input:

Direct Labor Activities: Labor Specialty Effort (hrs) CostPlan for top managementcapacity for long termstrategy

Senior Professional Specialist 24 $2,880.00Associate Professional Specialist 16 $1,440.00Clerical 8 $160.00

Execute success of long termstrategies

Senior Professional Specialist 24 $2,880.00Associate Professional Specialist 24 $2,160.00Clerical 24 $480.00

Evaluate Data CollectionExecutive 8 $1,920.00Senior Professional Specialist 8 $960.00

Total Direct Labor 136 $12,880.00Direct Non-Labor Activities (Material Costs-Office Supplies,Computer Expense $100.00Direct Overhead (Rated at 40% of Direct Labor Costs) $5,152.00Total Direct Cost (Labor + Non-Labor + Overhead) $18,132.00General Administrative Costs (Rated at 10% of Total Direct Costs) $1,813.20Total Cost (Total Direct Cost + General Administrative Costs) $19,945.20Profit (10% of Total Cost) $1,994.52Total Work Package Cost $21,939.72

Project: InnovativeCapabilities Audit

Work Package (2.1): Resource Availability and Allocation - Corporate Funding

Description: Plan andexecute assessment ofcorporate funding todetermine if funding isbeing appropriatelyallocated to research anddevelopment activities.

Deliverables: Results from Corporate Funding Assessment

Input: Work Packages (1)

Direct Labor Activities: Labor Specialty Effort (hrs) CostPlanning for CorporateFunding

Senior Professional Specialist ($120) 24 $2,880.00Clerical ($20) 3 $60.00

Execute Fieldwork ofCorporate Funding

Associate Professional Specialist($90) 40 $3,600.00Senior Technician ($80) - Helps topull data from database for analysis 16 $1,280.00

Evaluate Fieldwork TestingSenior Professional Specialist ($120) 16 $1,920.00Associate Professional Specialist($90) 8 $720.00

Review of AssessmentClerical ($20) 1 $20.00Executive ($240) 16 $3,840.00

Total Direct Labor 124 $14,320.00Direct Non-Labor Activities (Material Costs-Office Supplies,Computer Expense $100.00Direct Overhead (Rated at 40% of Direct Labor Costs) $5,728.00Total Direct Cost (Labor + Non-Labor + Overhead) $20,148.00General Administrative Costs (Rated at 10% of Total Direct Costs) $2,014.80Total Cost (Total Direct Cost + General Administrative Costs) $22,162.80Profit (10% of Total Cost) $2,216.28Total Work Package Cost $24,379.08

Project: Innovative CapabilitiesAudit Work Package (3.1 a): Understanding Technological Environment- Financial AnalysisDescription: Evaluate and assesseach research areas financialsituation

Deliverables: Determine which areas are the strongest and which areas have the mostpotential for growth.Input:

Direct Labor Activities: Labor Specialty Effort (hrs) CostEvaluate cash inflows andoutflows

Senior Professional Specialist 24 $2,880.00Associate Professional Specialist 16 $1,440.00Senior Technician 8 $640.00

Evaluate Budgets Senior Professional Specialist 24 $2,880.00Associate Professional Specialist 24 $2,160.00Apprentice Professional Specialist 8 $480.00

Review Financial Resources Executive 8 $1,920.00Senior Professional Specialist 8 $960.00

Total Direct Labor 120 $13,360.00Direct Non-Labor Activities (Material Costs-Office Supplies, ComputerExpense $200.00Direct Overhead (Rated at 40% of Direct Labor Costs) $5,344.00Total Direct Cost (Labor + Non-Labor + Overhead) $18,904.00General Administrative Costs (Rated at 10% of Total Direct Costs) $1,890.40Total Cost (Total Direct Cost + General Administrative Costs) $20,794.40Profit (10% of Total Cost) $2,079.44Total Work Package Cost $22,873.84

Project: Innovative CapabilitiesAudit

Work Package (4.1): Data Collection

Description: Plan and executecollection of firm's pastCompetition Analyses.

Deliverables: Results from Data Collection

Input:

Direct Labor Activities: Labor Specialty Effort (hrs) CostPlan Data Collection Senior Professional Specialist 24 $2,880.00Data Collection Associate Professional Specialist 24 $2,160.00

Apprentice Professional Specialist 24 $1,440.00Clerical 24 $480.00

Evaluate Data Collection Executive 8 $1,920.00Total Direct Labor 104 $8,880.00Direct Non-Labor Activities (Material Costs-Office Supplies, ComputerExpense $100.00Direct Overhead (Rated at 40% of Direct Labor Costs) $3,552.00Total Direct Cost (Labor + Non-Labor + Overhead) $12,532.00General Administrative Costs (Rated at 10% of Total Direct Costs) $1,253.20Total Cost (Total Direct Cost + General Administrative Costs) $13,785.20Profit (10% of Total Cost) $1,378.52Total Work Package Cost $15,163.72

Project Schedule

Gantt chart sample from MS Project. This portion of the project Gantt chart depicts work package 2.1-Corporate Funding, of the Resource Availability and Allocation section of Lone Star’s audit. Tasks are depictedin blue and summary tasks in black. The entire project consists of 158 tasks (including subtasks) and some taskswere delayed or split due to resource constraints, therefore presenting the entire project Gantt chart herewould be cumbersome, but it can be provided upon request.

6/3

6/10

6/17

6/24

7/1

7/8

7/15

7/22

7/29

8/5

8/12

8/19

8/26

9/2

9/9

9/16

9/23

9/30

10/7

10/14

10/21

10/28

Executive 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1SeniorProfessionalSpecialist 2 4 4 4 4 2 2 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1AssociateProfessionalSpecialist 2 4 4 4 4 4 1 1 1 0 0 0 0 1 1 1 1 1 1 1 1 0ApprenticeProfessionalSpecialist 2 3 3 3 2 0 1 3 1 0 1 1 1 0 0 0 0 0 0 0 0 0SeniorTechnician 1 1 0 1 1 0 0 1 0 0 0 0 0 1 1 0 0 0 0 1 0 0JuniorTechnician 0 0 0 1 1 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0Clerical 2 2 3 4 1 1 0 1 1 1 0 1 0 1 0 1 0 1 1 0 1 0

Human Resource Schedule. The number of each type of labor specialty assigned to the project is provided foreach week. This schedule is designed to minimize the weeks when an individual must work more than 40 hoursper week or less than 20. Although some positions require individuals leave and return to the project whenlabor is required, many individuals will not return once they leave the project, thus, eliminating the need forpeople to reorient themselves with the project upon their return. This is the best solution given the resource

needs of the project. Lone Star will receive ARI’s requests for the retention of specific individuals during theproject, but reserves control over its labor force.

Labor Specialty Hours/WeekExecutive 16.935Senior Professional Specialist 26.91591Associate Professional Specialist 26.26471Apprentice Professional Specialist 30.9103Senior Technician 19Junior Technician 16Clerical 13.07

Average work week for each labor specialty. Given the number of individuals of each labor specialty assignedto each week and the specialty’s required labor hours for that week the average work week for each specialtycan be computed. Individuals in the position of Apprentice Professional Specialist devote a greater portion oftheir time to a single project and thus, are scheduled a significant amount of time on the project, while theExecutive balances multiple projects and is scheduled for less time. Furthermore, the positions more relevantto the project are allotted more time than those with less application, e.g. the various Professional Specialistsare required for more tasks than the Technicians. The exact number of hours each specialty works each weekcan be provided upon request, but this table, coupled with the Human Resource Schedule, should provide ARIwith an approximation of the hours each position is available should one need to be contacted regarding theproject.

Cost Estimate

Total Phase Cost: $151,124.16Total Direct Hours: 1088

JOB DESCRIPTION

ITEMIZED ESTIMATE: TIME AND COST AMOUNTDirect Labor 378,340.00$Non Direct Labor 9,400.00$Overhead 151,336.00$General and Adminstrative 53,999.00$Profit 59,399.08$Direct Labor Hours 3,841.00

$652,474.08

Lone Star Consulting

Lone Star Consultants will perform a thourogh Innovative CapabilitiesAudit of Alamo Research Institute and its five divisions.Specificallyevaluating strategic management capacity, resources availibilty andallocation, the capcity to understand the technological environment, andcapacity to perform competition analyses.

Cost Description 1.1a 1.1b 1.1c 1.2a 1.2b 1.2c 1.3a 1.3bHours worked on job 136 136 136 136 136 136 136 136Direct Labor Cost 12,880.00$ 12,880.00$ 12,880.00$ 10,000.00$ 10,000.00$ 10,000.00$ 10,000.00$ 10,000.00$Overhead Cost 5,152.00$ 5,152.00$ 5,152.00$ 4,000.00$ 4,000.00$ 4,000.00$ 4,000.00$ 4,000.00$Direct Non Labor Cost 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$General and Adminsitrative 1,813.20$ 1,813.20$ 1,813.20$ 1,410.00$ 1,410.00$ 1,410.00$ 1,410.00$ 1,410.00$Profit 1,994.52$ 1,994.52$ 1,994.52$ 1,551.00$ 1,551.00$ 1,551.00$ 1,551.00$ 1,551.00$Total cost $21,939.72 $21,939.72 $21,939.72 $17,061.00 $17,061.00 $17,061.00 $17,061.00 $17,061.00

Price Estimate for ServicesInnovative Capabilities Audit- Strategic Management Capacity

Cost Description 2.1 2.2a 2.2b 2.2c 2.3 2.4a 2.4b 2.4cHours worked on job 124.00 124.00 124.00 124.00 80.00 127.00 132.00 126.00Direct Labor Cost 14,320.00$ 12,320.00$ 12,320.00$ 12,320.00$ 10,080.00$ 14,760.00$ 15,280.00$ 14,740.00$Overhead Cost 5,728.00$ 4,928.00$ 4,928.00$ 4,928.00$ 4,032.00$ 5,904.00$ 6,112.00$ 5,896.00$Direct Non Labor Cost 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$ 100.00$General and Adminsitrative 2,014.20$ 1,734.80$ 1,734.80$ 1,734.80$ 1,421.20$ 2,076.40$ 2,149.20$ 2,073.60$Profit 2,216.28$ 1,908.28$ 1,908.28$ 1,908.28$ 1,563.32$ 2,284.04$ 2,364.12$ 2,280.96$Total cost $24,378.48 $20,991.08 $20,991.08 $20,991.08 $17,196.52 $25,124.44 $26,005.32 $25,090.56

Price Estimate for ServicesInnovative Capabilities Audit- Resource Availability and Allocation

$180,768.56

961.00

Total Phase Cost:

Total Direct Hours:

Cost Description 3.1a 3.1.1a 3.1b 3.2a 3.2b 3.3a 3.3b 3.3cHours worked on job 120 128 120 120 120 120 120 120Direct Labor Cost 13,360.00$ 12,000.00$ 12,720.00$ 12,560.00$ 12,560.00$ 12,000.00$ 11,600.00$ 11,840.00$Overhead Cost 5,344.00$ 4,800.00$ 5,088.00$ 5,024.00$ 5,024.00$ 4,800.00$ 4,640.00$ 4,736.00$Direct Non Labor Cost 200.00$ 100.00$ 100.00$ 600.00$ 500.00$ 100.00$ 500.00$ 100.00$General and Adminsitrative 1,890.40$ 1,690.00$ 1,790.80$ 1,818.40$ 1,808.40$ 1,690.00$ 1,674.00$ 1,667.60$Profit 2,079.44$ 1,859.00$ 1,969.80$ 2,000.24$ 1,989.24$ 1,859.00$ 1,841.00$ 1,834.36$Total cost $22,873.84 $20,449.00 $21,668.60 $22,002.64 $21,881.64 $20,449.00 $20,255.00 $20,177.96

Price Estimate for ServicesInnovative Capabilities Audit- Capacity to Understand Technological Environment

$169,757.68

968.00

Total Phase Cost:

Total Direct Hours:

Project Risk Assessment

Key risks were identified and written as risk statements to gain an understanding of the types of issues thatcould face the project. Risk responses were also created to help mitigate the potential that these risks were tobecome realized.

# Risk Statement Risk Response1 If each work package is not completed on time,

then the project could be delayed and notcompleted on schedule.

Ensure that there is an appropriate amount of planning spent oneach work package (assessment) to gain an understanding ofthe scope and what needs to be completed for fieldworkassessments.

2 If a consultant is on leave, absent, or sick forextended period of time then the schedule maybe delayed.

During the ARI audit, ensure that other secondary resourcesfrom Lonestar Consulting Firm are on standby in the case that aselected consultant is unexpectedly unavailable.

3 If the audit has abnormally complex orcomplicated assessments the quality of the auditresults may be decreased and over schedule.

Ensure the right consultants with right history of experiencefrom the firm are assigned to the project.

4 If the audit requirements are not appropriatelydefined then the scope and created workpackages will not be completed on time or withthe right assessments.

Preliminary discussions with ARI management who arerequesting the innovative capabilities audit will be conducted tomitigate any undefined areas that have ambiguity.

5 If ARI personnel do not appropriately cooperatewith Lonestar consultants regarding the auditthen the right evidence may not be obtained andthe schedule overrun.

Ensure that a kick-off is conducted emphasizing partnership withARI and enlist the help of ARI management’s commitment toappropriately spend the right amount of time and resources onthe audit.

6 If the results of the assessment do notappropriately address ARI’s concerns andincrease their innovative capabilities thenLonestar Consulting reputation may decreasewith potential contract renegotiations by ARI.

Ensure that Lonestar Consulting Firm’s executive spends aportion of time on each work item that is performed anddelivered to ensure that the appropriate quality and insight isprovided.

7. If there are changes in the schedule mid-audit,then there may be a delay which may potentiallycause confusion and misallocation of resources.

Throughout the audit, apply corrections and guidance to theschedule and resources as needed to stay on schedule andbudget.

Cost Description 4.1a 4.2a 4.2b 4.2c 4.3a 4.3b 4.3c 4.4Hours worked on job 104.00 96.00 96.00 96.00 120.00 112.00 116.00 112.00Direct Labor Cost 8,880.00$ 10,360.00$ 10,240.00$ 10,240.00$ 12,080.00$ 10,320.00$ 11,040.00$ 11,760.00$Overhead Cost 3,552.00$ 4,144.00$ 4,096.00$ 4,096.00$ 4,832.00$ 4,128.00$ 4,416.00$ 4,704.00$Direct Non Labor Cost 100.00$ 100.00$ 3,200.00$ 300.00$ 600.00$ 100.00$ 100.00$ 1,100.00$General and Adminsitrative 1,253.20$ 1,460.40$ 1,753.60$ 1,555.60$ 1,751.20$ 1,454.80$ 1,555.60$ 1,756.40$Profit 1,378.52$ 1,606.44$ 1,928.96$ 1,711.16$ 1,926.32$ 1,600.28$ 1,711.16$ 1,932.04$Total cost 15,163.72$ 17,670.84$ 21,218.56$ 17,902.76$ 21,189.52$ 17,603.08$ 18,822.76$ 21,252.44$

Price Estimate for ServicesInnovative Capabilities Audit- Capacity to Perform Competitive Analyses

150,823.68$

852.00

Total Phase Cost:

Total Direct Hours:

Earned Value Plan

For the Performance Measurement Baseline, fixed formula (50/50) technique was used to determine thePlanned Value (PV).

Alamo Research Institute Organization Chart

The following divisions and groups would need to be coordinated with to have appropriate assessments anddiscussions to complete the innovative capabilities audit.

$125,655.20

$132,547.80$158,274.60

$247,238.20

$282,961.80

$357,321.80

$443,586.00

$469,803.40$498,517.80

$508,059.20$523,692.40 $535,112.60

$558,353.40

$581,578.80

$-

$100,000.00

$200,000.00

$300,000.00

$400,000.00

$500,000.00

$600,000.00

$700,000.00

11-Jun 18-Jun 25-Jun 2-Jul 9-Jul 16-Jul 23-Jul 30-Jul 6-Aug 13-Aug 20-Aug 27-Aug 3-Sep 10-Sep 17-Sep 24-Sep 1-Oct 8-Oct 15-Oct 22-Oct

11-Jun 18-Jun 25-Jun 2-Jul 9-Jul 16-Jul 23-Jul 30-Jul 6-Aug 13-Aug 20-Aug 27-Aug 3-Sep 10-Sep 17-Sep 24-Sep 1-Oct 8-Oct 15-Oct 22-OctCUM PV $125,65 $132,54 $158,27 $247,23 $282,96 $357,32 $443,58 $443,58 $469,80 $498,51 $498,51 $508,05 $523,69 $535,11 $535,11 $558,35 $558,35 $558,35 $581,57 $581,57

PV $125,65 $6,892. $25,726 $88,963 $35,723 $74,360 $86,264 $- $26,217 $28,714 $- $9,541. $15,633 $11,420 $- $23,240 $- $- $23,225 $-

Performance Measurement Baseline

START

FINISH

WEEK OF

Financial Office Division Engineering Division(Includes Aerospace Electronics,Data Systems, BiomedicalEngineering, Nanotechnologies,and Materials EngineeringDivisions)

Engineering Division –Advanced R&DGroups

Chief Executive Officer

CFD – InternalFunding Group

Venture Mgmt Division Legal Counsel

InformationTechnology Group

Marketing Division

Division of BusinessOperations

Business ContinuityGroup

Leads in business operations, engineering, and marketing to perform an assessment on skills Management in Internal funding to understand the process of how funding is being allocated Key individuals within the Financial Office Division to discuss and assess financial investments and

competitors Management in Operations will be utilized to evaluate the business operation practices Advanced R&D groups are needed to assess the allocation to exploratory research Senior Management and CEO to discuss new and developing businesses, corporate strategy &

framework, and entrepreneurial initiatives Mid-level management in all divisions will need to be utilized to assess communication with top level

management and to assess their capacity to coach new ventures. Leads and mid-level management in the Venture Management Division will be needed to assess

capacity, and business strategy for initiatives Lawyers in Legal Counsel to discuss processes surrounding patents Key management within the Marketing Division to discuss customers, promotions, and sales Key leaders within the Business Continuity area to discuss external exposures that could impact

business operations and other divisions Information Technology management to perform an assessment on technological factors, technology

roadmaps, and forecasting

During the audit, we will emphasize the importance for key individuals to participate so that accurate and validinformation will be gathered to perform a quality audit. Also during the kick-off meeting and other keymeetings with ARI executives, we will emphasize the need to have particular resources available during specificweeks which they are needed.

Contract Type

Lone Star Consulting is grateful to be considered by the Alamo Research Institute as a candidate to perform anInnovative Capabilities Audit. After careful evaluation, Lone Star Consulting proposes a fixed price contract.We are confident in our ability to stay on schedule and within our proposed cost.

Proposed Contract Offer:

Cost Estimate: Cex= $652,500.00Fee= $10,000.00

Price= $662,500.00

Our proposed start time is June 4th, with a projected completion date of October 30th. We will operate duringthe standard work week of Monday through Friday, 8 AM to 5 PM with a one hour break. Any proposedschedule changes or anticipated inconvenience to ARI’s daily business operations should be addressed to LoneStar Consulting prior to the project’s commencement. During the duration of the five month project, Lone StarConsulting and its employees will perform an Innovative Capabilities Audit for each research division.Specifically, we will be evaluating strategic management capacity, resources availability and allocation, thecapacity to understand the technological environment, and capacity to perform competition analyses. Thedata collected will be evaluated, reviewed, and the findings presented to ARI in a formal presentation whereARI can utilize the information to make informed decisions. The value of this service is expressed in Cex, whilethe Fee is a standard contracting fee. Any significant disagreements that arise during the project regarding howLone Star is carrying out the audit should be addressed to the project’s Executive in order to satisfy thesedisputes in a timely fashion. The proposed contract offer is valid for 90 days. After 90 days, the contract andproposal will be subject to reevaluation to ensure ARI that Lone Star Consulting is assessing any market orindustry changes. Lone Star Consulting appreciates your time and we guarantee that we will satisfy thesecontractual obligations. Lone Star Consulting looks forward to satisfying Alamo Research Institutes needs.