1. Source Selection Training
Cost/Price
Planning Module
Welcome to the Cost/Price Planning Training Session for AF Source Selections. This is a just-in-time briefing presented for your information as you assist in the planning stages and prepare to evaluate cost/price proposals in a source selection.
This Module will be given very early in the Source Selection planning process – prior to any major decisions being made.
NOTE: Risk Assessment, Market Research will be going on at this point.
Updates made for AFAC , 28 Jan 2008
Date: Mar 2008
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2. Overview Learning Objectives Cost/Price Terminology Rules of the Road
Source Selection Cost/Price Planning - 4 Steps
Cost/Price Analysts Role in Source Selection
Summary
Why do we need training on Cost/Price Evaluation?
What are our Objectives for today?
We will FOCUS on:
- Terminology
- Rules of the Road
- Planning
- Cost/Price Analyst’s role in Source Selection
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3. Learning Objectives
Become familiar with standardized cost/price terminology
Be able to determine the appropriate level and type of cost/price information for your source selection
Our objectives are to become familiar with standardized cost/price terminology and to be able to determine the appropriate level and type of cost/price information for your source selection.
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4. Cost / Price Terminology
Cost / Price: Term used to denote cost or price in a negotiated source selection
Cost includes all elements of cost
Price includes all elements of cost plus profit or fee as appropriate
The next few charts define some of the frequently used terms.
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5. Terms (cont’d) Contract price:
The price of the contract (cost plus profit or fee)
Cost to the government:
An amount paid by the government, which may include contract price and other related costs
Simplest case: contract price and cost to the government are identical
Complex case: contract price is relatively small part of cost to the government (e.g., life cycle cost)
FAR , price means cost plus any fee or profit applicable to the contract type.
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6. Terms (cont’d) Total Evaluated Price:
The Government’s calculation, based on details spelled out in Section M of the RFP, that will be provided to the Source Selection Authority (SSA)
Most Probable Cost:
Most probable cost is determined by adjusting each offeror’s proposed cost to reflect any adjustments to cost elements to realistic levels based on the results of the cost realism analysis
Most probable cost is used for the purposes of evaluation to determine the best value
Most Probable Cost (MPC)
MPC estimates is the government estimate of the costs to acquire specified goods and/or services. (MP5315.3, paragraph )
Includes costs that will be included as part of the contract
May include any other costs that will be incurred by the government in performance of the acquisition program
For ACAT 1 programs, the MPC must include an analysis of the uncertainties inherent in acquisition
From those related to the Cost estimating methods chosen
To those associated with the technical and programmatic assumptions of the program
FAR (d) states that probable cost of performance for each offeror will be computed when a cost realism analysis is performed.
Probable Cost:
Shall be used for cost-reimbursement contracts;
May be used for competitive fixed-price incentive contracts;
May even be used for competitive fixed-price-type contracts in exceptional cases, when:
-there is a history of non-performance or poor performance, or
-there is doubt that the requirements are understood.
AFFARS Mandatory Procedure (MP) , Paragraph , Most Probable Cost (MPC). The MPC estimate is the government estimate of the costs to acquire specified goods and/or services. This estimate includes not only those costs that will be included as part of the contract, but may include any other costs that will be incurred by the government in the performance of the acquisition program. For ACAT 1 programs, the PMC must also include an analysis of the uncertainties inherent in any acquisition, from those related to the cost estimating methods chosen, to those associated with the technical and programmatic assumptions of the program. The MPC is based upon an analysis of each offeror’s unique proposal in accordance with FAR , and may consider such information as contained in the Program Office Estimate (POE). Define all the components that make up the aggregate government most probable cost and specify them in the Section M evaluation criteria.
MP5315.3, Informational Guidance (IG) paragraph states “MPC referred to in the mandatory procedures is the same thing as the probable costs referred to in the FAR.
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7. Terms (cont’d) Cost/Price Risk Factor
Cost/Price Risk rating assesses the degree to which an offeror’s cost proposal compares with the Government’s best estimates of the offeror’s Most Probable Costs (MPC)
Shall be used for Acquisition Category (ACAT), System Development and Demonstration (SDD) phase programs that use a Cost Reimbursement or Fixed-Price Incentive type contract structure.
AFFARS MP , paragraph Cost/Price Risk. “This evaluation factor shall be used for Acquisition Category (ACAT), SDD phase programs that use a Cost Reimbursement or Fixed-Price Incentive type contract structure. The Cost/Price Risk rating assesses the degree to which an offeror’s cost proposal compares with the government’s best estimate of the offeror’s Most Probable Cost (MPC). Cost/Price Risk shall be a significant evaluation factor. If a Cost Reimbursement or Fixed-Price Incentive type contract is used for non-ACAT acquisitions and a government MPC is computed, a Cost/Price Risk Rating may be assigned with SSA approval.”
AFFARS MP5315.3, IG5315.3, paragraph (ref 1), states the purpose of the risk rating is to provide information to the SSA that allows selection of an offeror who proposed a rational and realistic cost for the work to be accomplished. Through the RFP, the Air Force team must communicate to all offerors our deep concern for risk to our programs that is associated with overly optimistic or unrealistic cost or price proposals. We must clearly convey to all offerors that submitting costs or prices based on unrealistic or overly optimistic development outcomes may result in that offeror not being selected for award.
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8. Terms (cont’d) Information Other than Cost or Pricing Data:
Is any type of information required to determine price reasonableness or cost realism, that does not require offeror certification as accurate, complete, and current in accordance with FAR
May include pricing, sales, or cost information
Includes cost or pricing data for which certification is determined inapplicable after submission
Cost and pricing data is defined at FAR
FAR (1) states “If the contracting officer cannot obtain adequate information from sources other than the offeror, the contracting officer must require submission of information other than cost or pricing data from the offeror that is adequate to determine a fair and reasonable price.”
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9. Terms (cont’d) Cost/Price Evaluation:
Assessment of offeror’s proposed prices and additional costs (if disclosed in the RFP) to determine:
Reasonableness
Cost realism
Unbalanced pricing
FAR covers proposal analysis techniques.
Contracting officer must determine the price to be fair and reasonable. The Government may use price analysis (FAR (b) or cost analysis (c) to determine reasonableness.
Cost realism analysis is discussed in FAR (d).
Unbalanced pricing is covered in FAR (g).
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10. Terms (cont’d) Reasonableness
Policy set forth in FAR (a)—Contracting officers must purchase supplies and services from responsible sources at fair and reasonable prices.
No FAR definition of reasonable
Business IPT definition: “For a price to be reasonable, it must represent a price to the government that a prudent person would pay when consideration is given to prices in the market”
Normally, competition establishes price reasonableness
FFP or FFP w/EPA, comparison of proposed prices usually satisfies requirement to perform a price analysis, and cost analysis need not be performed (FAR (a)(1)).
Cost analysis may also be used to evaluate information other than cost or pricing data to determine cost reasonableness or cost realism (FAR (a)(4)).
FAR objective of proposal analysis is to ensure that the final agreed-to price is fair and reasonable.
CO responsible for evaluating the reasonableness of the offered prices.
When cost or pricing data is NOT required - use PRICE ANALYSIS, FAR (a)(2).
When cost or pricing data IS REQUIRED - use COST ANALYSIS to evaluate reasonableness, FAR (a)(3).
COST ANALYSIS may be used TO EVALUATE OTHER THAN COST OR PRICING DATA information to determine cost reasonableness or cost realism, FAR (a)(4).
CO may request advice and assistance of other experts to ensure appropriate analysis is performed, FAR (a)(5).
Proposal Analysis Techniques (FAR ):
--Price Analysis
--Cost Analysis
--Cost Realism Analysis
--Technical Analysis
--Unit Price
--Unbalanced Pricing
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11. Terms (cont’d) Cost Realism
Cost realism means that the costs in an offeror’s proposal—
Are realistic for the work to be performed;
Reflect a clear understanding of the requirements; and
Are consistent with the unique methods of performance and materials described in the offeror’s technical proposal
FAR (d), Cost Realism Analysis. (1)” Cost realism analysis is the process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements are realistic for the work to be performed; reflect a clear understanding of the requirements; and are consistent with the unique methods of performance and materials described in the offeror’s technical proposal.”
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12. Unbalanced Pricing (FAR 15.404-1(g))
Terms (cont’d)
Unbalanced Pricing (FAR (g))
Exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated
May increases performance risk
Could result in payment of unreasonably high prices
Requires price or cost analysis
Could result in rejection of an offer if risk to the government is unacceptable
FAR (g) “Unbalanced pricing exists when, despite an acceptable total evaluated price, the price of one or more contract line items is significantly over or understated as indicated by the application of cost or price analysis techniques.”
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13. Terms (cont’d) Price Analysis
Definition: Process of examining and evaluating a proposed price without evaluating the individual elements of cost elements and proposed profit. FAR (b)(1)
Price Analysis Techniques
Comparison of proposed prices received to
Each other (adequate price competition)*
Historical contract prices*
Price lists
Independent Government cost estimates
Prices obtained through market research
Parametric estimating models
Analysis of pricing info provided by offerors
*Preferred techniques per FAR (b)(3)
FAR (b) Price Analysis
Independent Government Estimates (IGE) should be prepared prior to receipt of proposals.
[Presenter: be prepared to clarify use and source of the IGE]
It is important to understand the quality of an IGE before relying on it, since some IGE’s have been found to be poor estimates in the past.
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14. Adequate Price Competition (APC) FAR 15.403-1(c)(1)
Terms (cont’d)
Adequate Price Competition (APC) FAR (c)(1)
A price is based on APC if
Two or more responsible offerors, competing independently, submit priced offers that satisfy the Government’s requirement and if
Best value source selection where price is a substantial factor
There is no finding the price of the otherwise successful offeror is unreasonable
There was a reasonable expectation, based on market research or other assessment, that two or more independent, responsible offerors would submit priced offers even though only one is received and
The CO can conclude the offer was submitted with the expectation of competition
Reasonable determination that proposed price is based on APC and approved at a level above the CO
Price analysis demonstrates reasonableness
FAR (c)(1) provides the coverage of adequate price competition.
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15. Terms (cont’d) Cost Analysis
Definition: The review and evaluation of individual elements of cost and profit in an offeror’s proposal and the application of judgment to determine how well the proposed costs represent what the cost of the contract should be assuming reasonable economy and efficiency (FAR (c)(1)).
Various Cost Analysis Techniques:
Verification of cost or pricing data and evaluation of cost elements
Evaluating the effect of offeror’s current practices on future costs.
Comparison of costs proposed for individual cost elements with
Actual costs previously incurred by same offeror
Previous cost estimates and other cost estimates
Independent Government cost estimates by technical personnel
FAR (c) provides coverage of cost analysis.
The real DIFFERENCE between using the PRICE Analysis vs. COST Analysis technique is whether or not you analyze INDIVIDUAL COST ELEMENTS.
In PRICE Analysis, typically, evaluate CLIN prices only. The Government may make adjustments to the proposed total price due to risk or life cycle cost. However, the analysis would be limited to the Line Item price, not individual cost elements.
COST analysis - which can be extremely time consuming and administratively burdensome - evaluates the INDIVIDUAL ELEMENTS OF COST and PROFIT. It may include everything from a bill of material, individual components, subcontracts, labor hours, rates, factors, etc.
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16. Terms (cont’d) Cost Realism Analysis
Definition: The process of independently reviewing and evaluating specific elements of each offeror’s proposed cost estimate to determine whether the estimated proposed cost elements:
Are realistic for the work to be performed;
Reflect a clear understanding of the requirements; and,
Are consistent with the unique methods of performance and materials described in the offeror’s technical proposal
FAR (d)(1)
FAR (d) Cost realism analysis.
(1) INDEPENDENTLY REVIEWING AND EVALUATING SPECIFIC ELEMENTS of each offeror's proposed cost estimate TO DETERMINE whether cost elements are REALISTIC for the work to be performed; REFLECT A CLEAR UNDERSTANDING of the requirements; and are CONSISTENT with the unique methods of performance and materials described in the offeror's technical proposal.
(2) Shall be performed on cost-reimbursement contracts to determine the probable cost of performance for each offeror.
(3) May also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully understood by competing offerors, there are quality concerns, or past experience indicates that contractors proposed costs have resulted in quality or service shortfalls.
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17. “Rules of the Road” What to Submit How Government will Evaluate Cost
Section L
How Government will Evaluate Cost
Section M
Perform the Evaluation
Source Selection Evaluation
How they Did
Debriefing
The RFP SHOULD:
1. Tell the offerors WHAT to submit
2. HOW you are going to evaluate it
The TEAM should
3. PERFORM evaluation EXACTLY as stated in the RFP
And FINALLY
4. DEBRIEF the offerors, telling them HOW they did
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18. Cost/Price Planning Process
Steps. . .
to Success !
We’d like to show you the actual PLANNING PROCESS or “STEPS TO SUCCESS” that will help teams determine the appropriate COST/PRICE EVALUATION APPROACH for their acquisition.
It’s a logical step by step process that should lead them towards the best approach, and of course, it can be TAILORED.
4 Steps!
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19. 4 Steps
Step 1 – Determine Importance of the Cost/Price Factor relative to other evaluation factors
Step 2 – Determine Cost/Price Evaluation Criteria and Methodology
Step 3 – Determine Content of the Cost/Price Evaluation
Step 4 – Determine Data You Will Need
The four steps are outlined for you here and will be discussed in more detail in the next few charts
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20. Step 1 Importance of Cost/Price Factor
Common to all source selections
Mandatory evaluation factor
RFP must disclose importance of price relative to other factors
1. Why do we perform PRICE or COST ANALYSIS ?
To Establish REASONABLENESS and REALISM.
2. Cost/Price is a MANDATORY FACTOR for ALL source selections
3. For OFFERORS to make INFORMED decisions:
-Every SOLICITATION (RFP) will contain a DESCRIPTION of the METHOD, TECHNIQUES, AND PROCEDURES by which COST OR PRICE will be ANALYZED.
4. The LEVEL OF DETAIL REQUIRED WILL VARY, depending on: complexity, circumstances, competition, phase of the program, type of product/services, contract type.
5. But, the RFP must disclose:
- COST/PRICE INFORMATION REQUIRED
- HOW IT WILL BE EVALUATED
- HOW IT WILL BE ADJUSTED (IF APPLICABLE)
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21. Step 1 Importance of Cost/Price Factor
Determine where you fit in the best value continuum based on:
Market research
Risk
Contract type
Importance of:
Proposed technical solution
Cost/price
1. Determine where your acquisition is in the BEST VALUE CONTINUUM based on the above considerations.
2. Team must decide the Source Selection Technique
- Sealed Bid
- Lowest Price Technically Acceptable (LPTA)
- Performance Price Trade-Off (PPT)
- Full Trade-Off (FTO)
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22. The Best Value Continuum
GREATER Importance of Price Lesser
Lesser Technical Complexity GREATER
F A R P a r t 1 2
FAR Part 14
FAR Part 15
After working with the team through
a. Market Research,
b. Risk Analysis,
c. Analysis of Technical Complexity,
d. Commercial Vs Non-Commercial, etc.
Determine the appropriate source selection technique.
Sealed Bid
LPTA
PPT
Full Trade-Off
Common Denominator - Cost/Price Factor
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23. Step 1 Importance of Cost/Price Factor
Performance Price Trade-off (PPT)
Determine the Ranking and Relative Importance of Cost/Price Factor Between the following Evaluation Factors
Past Performance
Cost/Price
Cost/Price Risk (if applicable)
SSA Approves Ranking
For source selections using the Lowest Price Technically Acceptable (LPTA) process, there is no ranking.
AFFARS MP , Paragraph , states that a Cost/Price Risk Factor is required for ACAT programs, SDD phase programs that use a Cost Reimbursement or Fixed-Price Incentive type contract structure. The Cost/Price Risk rating assesses the degree to which an offeror’s cost proposal compares with the government’s computed Most Probable Costs (MPC). Cost/Price Risk shall be a significant evaluation factor. If a Cost Reimbursement or Fixed-Price Incentive type contract is used for non-ACAT acquisitions and a government MPC is compute, with SSA approval, a risk rating may be assigned.
Cost/price must contribute substantially to decision
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24. Step 1 Importance of Cost/Price Factor
Full Trade-Off Source Selections
Determine the Ranking and Relative Importance of Cost/Price Factor Among the Chosen Evaluation Factors
Mission Capability
Past Performance
Cost/Price
Cost/Price Risk (if applicable)
SSA Approves Ranking
For FULL TRADE-OFF source selections, team MUST determine
1. RANKING of the factors and subfactors
2. RELATIVE importance of cost/price factor in relation to the other factors.
Cost/Price must contribute substantially to decision in order for the CO to determine he/she has adequate price competition. (FAR (c)(1) says price is based on adequate price competition if award will be made to the offeror whose proposal represents the best value where price is a substantial factor in the source selection.)
Cost/price must contribute substantially to decision
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25. Step 2 – Cost/Price Evaluation Criteria and Methodology
Fixed-Price Contracts
Section M Criteria
Reasonableness (including balanced prices)
Section M Evaluation Methodology
Price Analysis
Cost Realism Analysis may be used on competitive fixed-price incentive contracts or, in exceptional cases, on competitive fixed-price-type contracts when
New requirements may not be fully understood by offerors
There are quality concerns
Past experience indicates that contractors proposed costs have resulted in quality or service shortfalls
FAR (d)(3) “Cost realism analyses may also be used on competitive fixed-price incentive contracts or, in exceptional cases, on other competitive fixed-price-type contracts when new requirements may not be fully understood by competing offerors, there are quality concerns, or past experience indicates that contractors proposed costs have resulted in quality or service shortfalls. Results of the analysis may be used in performance risk assessments and responsibility determinations. However, proposals shall be evaluated using the criteria in the solicitation, and the offered prices shall not be adjusted as a result of the analysis.”
Labor-Hour and Time-and-Materials (FAR 16.6). There are two types of compensation arrangements that do not completely fit the mold of either fixed-price or cost-reimbursement contracts. Labor-hour and time-and-materials contracts both include fixed labor rates but only estimates of the hours required to complete the contract. They are generally considered to most resemble cost-reimbursement contracts because they:
- Do not require the contractor to complete the required contract effort within an agreed-to-maximum price; and
- Pay the contractor for actual hours worked. (Contract Pricing Reference Guide, Volume 4, Chapter 1.)
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26. Step 2 – Cost/Price Evaluation Criteria and Methodology
Cost Reimbursable
Section M criteria
Reasonableness (including balanced prices)
Cost realism
Section M Evaluation methodology
Cost realism analysis
Shall be performed on Cost-Reimbursement contracts to determine Probable Cost of performance
Cost/Price Risk assessment (if applicable)
May be used on competitive fixed price in certain cases
Price analysis
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27. Step 3--Content of the Cost/Price Evaluation
Cost/Price Evaluation is driven by contract type
FFP Contracts (Far Part 12 or 15)
Content to be evaluated may include:
CLIN prices
Fixed Rates
Other Government Costs (OGCs), such as GFP, cost of contract financing, risk etc.
Appropriate Terms
Evaluated Contract Price = CLIN prices added up
Total Government Cost = CLIN prices + OGC
Specify in Section M which formula you will use for evaluation of cost/price volume.
FAR (b) says the contracting officer may require information other than cost or pricing data to support a determination of price reasonableness or cost realism.
AFFARS (a) For firm-fixed-price (FFP) competitive contracts where adequate price competition is anticipated, approval to obtain information other than cost or pricing data from offerors shall be obtained from DAS(C).
You do not need a waiver to ask for other than cost or pricing data from offerors on other fixed price type contracts including fixed price award fee, fixed-price-incentive, fixed-price level of effort, or an IDIQ contract that may have time-and-material orders with fixed price rates.
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28. Step 3 Content of the Cost/Price Evaluation
Cost Reimbursable Contracts
Content to be evaluated may include:
Contract Cost Elements
Rates
OGCs
Risk (may result from technical, schedule, cost)
Life Cycle Cost (organic support, ICS, CLS, Military construction, disposal/demilitarization)
Appropriate Terms
Most Probable Cost
Cost/Price Risk Rating (if applicable)
Specify formula in Section M
Formula in Section M must spell out all costs that are to be included in the computation of the Most Probable Cost.
ICS = Interim Contractor Support
CLS = Contractor Logistics Support
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29. Step 3 Content of the Cost/Price Evaluation
Indefinite Quantity (IQ) Contracts
Indefinite Delivery (ID) IQ most common
Content to be evaluated may include:
CLINs
Sample tasks
Fixed rates, Best Estimated Quantity (BEQ)
OGCs, such as GFP, cost of contract financing, risk
Appropriate Terms
Evaluated price = fixed rates x BEQ
Total government cost = (Fixed Rates x BEQ) + OGC (may also include CLINs)
Specify formula in Section M
Total Government Cost may just use BEQ’s or it may include the full range of quantities spelled out in the CLINs. Select the method that will provide the best overall evaluation and not allow the offerors to “game” the evaluation.
Basic year plus all option years must be evaluated.
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30. Step 4 Cost Information Needed
Determine what cost information will be required to perform the Section M cost/price evaluation
Sources of information may include:
Offerors (requested in Section L)
Contract Type drives the cost information you may request from offerors
Other Government Agencies, such as DCAA, DCMA, Other Services, NASA, etc.
Market Research
Program Office
Independent Government Estimate (IGE)
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31. Step 4 Cost Information Needed
FFP/IDIQ Contracts
Offeror Information (Section L):
CLIN prices
Loaded Labor Rates (e.g. T&M, IDIQ)
Pricing matrices (e.g., IDIQ)
Prices of GFP (acquisition cost to offerors)
Financing terms
Economic Price Adjustment terms
“Other than cost or pricing data” requires approval from SAF/AQC (AFFARs (a))
If CO determines there isn’t adequate price competition, “cost or pricing data” may be required (15.403)
Rates (e.g. T&M, IDIQ) – These are usually loaded labor rates
Pricing matrices (e.g., IDIQ) Quantity Ranges times Unit price for the range, or Labor Category times the Labor rate
Prices of GFP/GFE (acquisition cost to offerors) – price that particular contractor would have paid if it was not provided by the GOVERNMENT.
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32. Step 4 Cost Information Needed
Cost Reimbursable Contracts
Offeror Information (Section L):
All contract costs by cost element
Labor rates & applicable burdens
Subcontract Proposal Evaluation, if >$650k
Subcontract Proposal, if >$11.5M or 10% of contract value
Status of Contractor Accounting System
Parametric model info
Reliability & Maintainability data (e.g. failure rates, repair data)
FAR provides requirements for subcontract pricing considerations.
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33. Step 4 Cost Information Needed
Cost Reimbursable Contracts
Offeror Information (Section L):
Offeror shall provide an analysis of uncertainty as part of the cost/price volume if the Cost/Price factor utilizes the MPC estimating process for an ACAT I program
Cost uncertainty analysis will be conducted that allows a range (or distribution) of possible costs developed based on statistical techniques
Cost uncertainty analysis will quantify this uncertainty caused by the variance in cost estimating methods, as well as uncertainty in the technical, schedule, performance and programmatic inputs
The application of various statistical techniques, inherent in uncertainty analysis will result in a mathematically correct MPC, a level of confidence, and the confidence levels for all other costs
Offerors shall refer to and use the “Air Force Cost and Risk Uncertainty Handbook” as a guide when preparing this analysis
(If the Cost/Price factor utilizes the Most Probably Cost (MPC) estimating process for an ACAT I program, include a paragraph substantially similar to the following.)
The source selection evaluation for this ACAT I program will utilize the Most Probable Cost (MPC) estimating process. As a result, cost uncertainty analysis will be conducted that allows a range (or distribution) of possible costs developed based on statistical techniques. This is necessary because the term “most probable” implies that other less likely estimates exist. Cost uncertainty analysis will quantify this uncertainty caused by the variance in cost estimating methods, as well as uncertainty in the technical, schedule, performance and programmatic inputs. The application of various statistical techniques, inherent in uncertainty analysis will result in a mathematically correct most probable cost, a level of confidence, and the confidence levels for all other costs. In addition to providing the proposed cost/price information, the offeror shall provide an analysis of uncertainty as part of the cost/price volume. When preparing this analysis of uncertainty, offerors shall refer to and use as a guide, the “Air Force Cost and Risk Uncertainty Handbook,” located on the FM Knowledge Now Website at
(paragraph taken from draft IG5315.3XX, Source Selection Documentation, Solicitation – Section L, Instructions, Conditions, and Notices to Offerors or Respondents Guide, March 2008)
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34. Step 4 Cost Information Needed
Cost/Price Information from other sources
Contract Price history
Program cost/sales histories
Wage determinations
Technical reports
Market prices for same/similar items
OGC information, e.g. facilities, range support, etc.
Forward Pricing Rate Agreements/Recommendations
Program office estimate (Budget)
O&S Data
Concept of Operations (CONOPS )
Maintenance Concept (ICS, CLS, Organic, Mix)
Organic Personnel Requirements
# years of ramp-up, steady state
Published Price Indices
Catalog prices/Price lists
Parametric models
Can be used with either FFP or CR contract types.
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35. Cost/Price Analyst’s Role in Source Selection
Acquisition Planning Phase:
Provide Program Support/Advice
Assist Teams with Cost/Price Evaluation Approach
Participate in pre-solicitation exchanges with Industry or Potential Offerors on Most-Probable-Cost Analysis (for ACAT programs when applicable)
ASP Briefing:
Cost/Price Evaluation Approach Presented
OPR Identified for Cost/Price Support
Source Selection Phase:
Provide Cost/Price Support and Analysis as Required
FIRST:
We defined organization’s roles in providing COST or PRICING SUPPORT to source selection teams during the PREAWARD phase.
1. During ACQUISITION PLANNING PHASE
- Contracting will Provide Support and advice
- MP5315.3, paragraph requires exchanges with industry on MPC analysis during the preparation of the solicitation. Detailed exchanges or deliberations should occur between the government and potential offerors regarding program cost estimates and the methods of estimating costs.
2. At ASP BRIEFING:
- Cost/Price EVALUATION APPROACH Presented
- Contracting OPR Identified
3. During SOURCE SELECTION PHASE
- The Contracting OPR Provides support as required
Note: At some locations, support is provided by the PK Price Analyst and/or the FM Cost Analyst.
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36. Summary Cost/Price Terminology Rules of the Road
4 Steps for Cost/Price Planning
Determine importance of Cost/Price factor relative to other evaluation factors
Determine Cost/Price Evaluation Criteria and Methodology
Determine the content of the Cost/Price Evaluation
Determine what data you will need
Cost/Price Analysts Role in Supporting Source Selection
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