Andrea O’Neill Cost/Price Analyst ACC-RSA

Elements of a Proposal; Proposal Example Indirect Rate Calculations Unallowable Costs; Preparing For Negotiations; and Common Deficiencies Found in Proposals. AGENDA

ELEMENTS OF A PROPOSAL Cover Sheet (FAR , 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 )

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 ). 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 ); 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 Contract Pricing Reference Guide

QUESTIONS