PREPARING A COST PROPOSAL

Report
Andrea O’Neill
Cost/Price Analyst
ACC-RSA
AGENDA
 Elements of a Proposal;
 Proposal Example
 Indirect Rate Calculations
 Unallowable Costs;
 Preparing For Negotiations; and
 Common Deficiencies Found in Proposals.
ELEMENTS OF A PROPOSAL
 Cover Sheet (FAR 15.408, Table 15-2 I.A.)
 Summary by Cost Element
 Direct Labor (Table 15-2 II.B.)
 Indirect Costs (Table 15-2 II.C.)
 Other Costs (Table 15-2 II.D.)
 Profit/Fixed Fee (FAR 15.404-4)
ELEMENTS OF A PROPOSAL
 Basis of Estimate
 Indirect rate computation and
application;
 Cost breakdowns and budgetary data
 Other information requested in RFP,
Section L.
SAMPLE PROPOSAL
TECHNICAL
SUPPORT
CONTRACT
PROPOSAL REQUIREMENTS
XYZ Technologies, Inc. has just submitted a proposal to the
Federal Government for the task of surveying an
environmentally sensitive plot of land for the construction
of a complex Government Building.
XYZ Technologies, Inc. does not have the expertise to handle
the suspected pollutants believed to be under the site. XYZ
Technologies, Inc. subcontracted certain aspects of the
environmental site work to Enviro, Inc. the only firm in the
state that has the current technology to perform the
necessary testing.
Because the proposal is greater than the cost or pricing data
threshold, a cost analysis will be performed on the
proposal.
PROPOSAL SUBMISSION
 See sample proposal in excel file.
PROPOSAL EXERCISE
DIRECT LABOR (Sch 1)
 Support the proposed labor cost of $338,000;
 Provide the basis for the hours and hourly
rates.
 Example: Hours are based on Contract
ABC which was performed in FY 2011 and
was similar to this effort. The hourly rates
are based on current average rates paid to
those labor categories. Payroll records are
available upon request.
PROPOSAL EXERCISE
SUBCONTRACTOR COST (Sch 2b)
 Support the proposed subcontractor cost of
$115,948;
 Provide a cost/price analysis on Enviro, Inc.
(FAR 15.404-3).
 If subcontract is based on competition, then
provide quotes from the other bidders and
an explanation why this one was selected;
 Subcontractor generally provides
unsanitized proposal directly to
Government.
PROPOSAL EXERCISE
INDIRECT RATES (Sch 4)
 Provide budgetary data on how indirect
rates were calculated;
 Provide basis of estimate.
PROPOSAL EXERCISE
BILL OF MATERIAL (Sch 3)
 Either provide quotes for items in BOM or
have readily available for review;
 If sole source procurement, then provide
justification.
UNALLOWABLE COSTS
 Determining Allowability (FAR 31.201-2);
 Reasonableness;
 Allocability;
 GAAP and practices appropriate to the
particular circumstances;
 Terms of the Contract.
PREPARING FOR NEGOTIATIONS
• Personnel to bring to the negotiation table:
• Authorized personnel to bind the
company
• Technical personnel familiar with
estimates
• Cost estimator who prepared the proposal
• Data related to the proposed costs
• Updated information since original proposal
developed.
COMMON DEFICIENCIES
• Lack of supporting data
• No Basis of Estimate (BOE)
• Not complying with RFP instructions
• Math Errors
• Summary and supporting schedules not
tying
REFERENCES
• FAR PART 15 – Contracting By Negotiation
• FAR PART 31 – Contract Cost Principles
• DCAA’s Information for Contractors
www.dcaa.mil
• Contract Pricing Reference Guide
• https://acc.dau.mil/cprg
•
QUESTIONS

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