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Workload fluctuation is one of the challenges facing contracting organizations. Previous studies balanced this fluctuation using capacity adjustment. Most of these studies ignored the simultaneous effect between the direct and indirect variables and the nondeterministic nature of these variables. Moreover, local decisions, i.e. project-based decisions, receive the most attention from contractors. Contrarily, its long-term effect on the organization and its influence on the future project's success receives little attention. This study utilizes a system dynamics approach to holistically address the workload fluctuation of contracting organizations. The model links the pre-award and after-award project phases at the portfolio level. The model is validated through extreme case analysis, units' consistency test, sensitivity analysis test, and industry experts. Results from model analysis inform that the internal behavior and mental model (soft logic) are significantly affecting the long-term performance of contractors more than the external (hard) factors. For instance, the quality level is more important than the initial cash. Also, overhead and markup percent have a significant impact on long-term behavior. Overheads have a relatively more effect on short-term behavior than the markup percent. This research is limited to representing the contracting organization in the execution phase and could be enhanced in the future by incorporating other phases such as design. [ABSTRACT FROM AUTHOR]