“Pricing” Florida SBDC at FGCU Helping Businesses Grow & Succeed “Doing Business with the Government” State Designated as Florida’s Principal Provider of Business Assistance [§ , Fla. Stat.]

Helping Businesses Grow & Succeed Mission Statement We are a customer-driven organization of business professionals, dedicated to helping small businesses succeed, by enthusiastically providing creative solutions which exceed customer, employee, and stakeholder’s expectations.

Helping Businesses Grow & Succeed Statewide Infrastructure Our Network S tatewide network of 43 centers involving: State Universities Colleges Chambers of Commerce Economic Development Councils Federal, State & Local Government Agencies Additional outreach is provided at more than 50 outreach locations, utilizing resource partners such as chambers of commerce, economic development organizations, business incubators and lending institutions. Locations

Helping Businesses Grow & Succeed Accelerating Florida’s Economy Only statewide provider of entrepreneurial and emerging growth company services, playing a vital role in Florida’s economic development: Assisting entrepreneurs in every stage of the business cycle, from prospective entrepreneurs to mature businesses looking for growth opportunities and more; Working with firms in all industry sectors; Utilizing the expertise and resources of some of the best universities in Florida (Florida Gulf Coast University)and a professional staff of eleven business consultants; Accessing the resources of a national network of more than 5,000 SBDC professionals; and The FSBDCN is nationally accredited through the Association of SBDCs by Congressional mandate.

Helping Businesses Grow & Succeed FSBDC Services Consulting Personalized, confidential and provided at no cost Training Value-added from the basics to advanced topics Business Data & Information Current and expansive information for better decision-making

Helping Businesses Grow & Succeed Objectives Cost Cost Realism Price Price Analysis Profit

Helping Businesses Grow & Succeed References FAR 14 Sealed Bidding FAR 15 Contracting By Negotiations FAR 16 Type of Contracts FAR 30 Cost Accounting Standards Administration FAR 31 Cost Principles and Procedures FAR Appendix B Cost Accounting Rules

Helping Businesses Grow & Succeed Methods of Procurement Sealed Bids (Price only) Invitation For Bid (IFB) Negotiated (Price or Cost) Request For Quote (RFQ) (Price only) Request For Proposal (RFP) (Price or Cost Data)

Helping Businesses Grow & Succeed What is Cost? Cost is the expense the contractor will incur in performing the work

Helping Businesses Grow & Succeed Cost Criteria: Reasonable, Allowable and Allocable Variable, Fixed, and Semi-Variable Direct and Indirect

Helping Businesses Grow & Succeed COST CONTRACTS Cost-Plus-Fixed Fee Cost-Plus-Award Fee Cost-Plus-Incentive Fee Cost-Sharing

Helping Businesses Grow & Succeed Three Basic Cs For Cost Type Contracts Know your Costs Know your Customer Know your Competition

Helping Businesses Grow & Succeed What will the Government Pay? The Government will reimburse the contractor to do the work as long as the costs are allowable, reasonable, and properly allocable to the contract

Helping Businesses Grow & Succeed What are the Cost Elements? (Your Company) Direct Labor Overhead Material Subcontractors General and Administrative Travel Profit

Helping Businesses Grow & Succeed 1) Overhead may include: Cost of Doing Business!!!!! Taxes Federal Taxes Social Security (FICA) Employer Portion Medicare Taxes Property Taxes Licenses State Licenses County Business Licenses

Helping Businesses Grow & Succeed 2) Overhead Continued: Fringe Benefits: Employee Health Insurance Annual Leave Sick Leave Family Leave Retirement

Helping Businesses Grow & Succeed 3) Overhead Continued: Office Space Furniture Electricity Air Conditioning Heat Equipment Copier Computers Phone

Helping Businesses Grow & Succeed 4) Overhead Continued: Utilities: Sewage Waste Water Treatment Trash Removal Recycle Program

Helping Businesses Grow & Succeed Insurance Building, Car, Truck Worker’s Compensation Contract Requirements Credit Cards Bldg. Maintenance Lawn Service Depreciation Interest on Loans 5) Overhead Continued:

Helping Businesses Grow & Succeed What are the Cost Elements? (State) Salaries Fringe Benefits Travel Other Direct Costs In-House Charges Indirect Cost Profit

Helping Businesses Grow & Succeed Build a Cheeseburger?

Helping Businesses Grow & Succeed One make every 30 seconds, start to finish Includes: Direct Labor Overhead Material Profit Base Line for the Cheeseburger

Helping Businesses Grow & Succeed Direct Labor ½ minute labor $ minute labor $00.40 Counter Clerk$8.05 Cashier $8.05 Cook $8.05 Total $24.15

Helping Businesses Grow & Succeed Overhead 100%

Helping Businesses Grow & Succeed Materials Build a cheeseburger starting at the bottom Bun Bottom Mayonnaise Mustard Patty Cheese Pickle Lettuce Tomato Ketchup Sesame Seed Bun Top

Helping Businesses Grow & Succeed Bun Bottom$ Mayonnaise$ Mustard$ Patty$ Cheese$ Pickle$ Lettuce$ Tomato$ Ketchup$ Sesame Seed Bun Top$ Total $ Material Costs

Helping Businesses Grow & Succeed Material Costs Wrapping Paper$ Bag$ Napkins$ Salt/Pepper$ Total$00.006

Helping Businesses Grow & Succeed Cost Elements for the Cheeseburger? Direct Labor $00.20 Overhead 100%$00.20 Material$00.71 Subtotal$01.11 Profit 10%$00.11 Total Cost $01.22

Helping Businesses Grow & Succeed Cost Elements + Profit = Total Cost What is Total Cost?

Helping Businesses Grow & Succeed Cost Realism Cost and Technical proposals must be realistic for the work to be performed Reflect a clear understanding of the requirement Cost must be consistent with the various elements of the technical proposal

Helping Businesses Grow & Succeed Profit Represents the payment the contractor may receive for performance over and above the cost incurred for doing the work Contractor/Government Risk

Helping Businesses Grow & Succeed Profit Statutory Limits Cost Plus Fixed Fee 10% Research and Development Cost Plus Fixed Fee 15% Architect and Engineering Services 6%

Helping Businesses Grow & Succeed What is Price? Cost Elements + Profit = Price

Helping Businesses Grow & Succeed What is the Price for your Service?

Helping Businesses Grow & Succeed Price Direct Labor$10.00 (Unloaded Rate) Overhead$15.00 Est. 150% Material$03.20 Subtotal$28.00 Profit$02.80 Total Price$31.00 (Loaded Rate)

Helping Businesses Grow & Succeed Profit Factors for FFP Contracts Market Competition Contractor Risk 100%

Helping Businesses Grow & Succeed Sales-Direct Cost-Indirect Cost= Net Profit Are you Making a Profit?

Helping Businesses Grow & Succeed Price Analysis Process of examining and evaluating a proposed price without regard to evaluating the separate cost elements and proposed profit.

Helping Businesses Grow & Succeed Firm-Fixed-Price Firm-Fixed Price with Economic Adjustments Indefinite Delivery Contracts Time and Material Labor Hour Letter Contract Firm Fixed Price Contracts

Helping Businesses Grow & Succeed Price must be Fair and Reasonable Based on: Adequate Price Competition Previous Prices Yardstick Published Prices or Independent Government Estimate

Helping Businesses Grow & Succeed 2080 Hours = Government Year Loaded-Unloaded Rates Separate Technical and Cost Proposals DCMA- Direct Labor Rates Overhead G&A (For a Specific Company) Best Value Awards Technical Past Performance Price TIPS

Helping Businesses Grow & Succeed Cost Cost Realism Price Price Analysis Profit Summary

Helping Businesses Grow & Succeed Q & A “Daniel Telep Jr.” Florida Gulf Coast University FSBDC or