1. Proposal Pricing Training February 2004 Lance I. Stadler Pricing Manager, Corporate Headquarters Stanley Headquarters 300 North Washington Street, Suite 400 Alexandria, VA 22314-2530 703-684-1125 www.stanleyassociates.com

2. COMMITMENT, INTEGRITY, RESULTS 2 Objectives Provide a consistent approach to proposal pricing Provide insight into what is required by the proposal pricing process and what is required from the capture team Provide overall pricing knowledge to capture team

3. COMMITMENT, INTEGRITY, RESULTS 3 Who Are Our Customers? External –Buyer/Government –Contracting Officer –Cost Evaluators –DCAA/DCMA Internal –Corporate Development Staff –Program Managers –Account Managers –Executive Management

4. COMMITMENT, INTEGRITY, RESULTS 4 Four Phases of Proposal Pricing Preparation Phase –Plan and assign proposal responsibilities to ensure compliance with the proposal request (RFP, PCE, ROM, etc) Estimating Phase –Develop labor estimates; identify material and travel requirements, and other direct costs Pricing Phase –Refine estimates and price in appropriate submittal format utilizing provisional indirect rates and standard escalation –Ensure compliance with all requirements (RFP, FAR, Stanley Policy) Management Review –Allow sufficient time for review from Account Managers, as well as Executive Management.

5. COMMITMENT, INTEGRITY, RESULTS 5 Types of Proposals Customer Types –Federal Government –State & Local Government –Commercial Entities –International Government Contract Types –Cost Reimbursable Fixed Fee Award Fee Incentive Fee –Fixed Price –Time & Material –Indefinite Delivery/Indefinite Quantity (IDIQ) –Government Wide Acquisition Contracts (GWAC) Proposal Types –Commercial –Competitive –Sole Source –Contract Modifications –Follow-On –Best and Final Offer (BAFO)

6. COMMITMENT, INTEGRITY, RESULTS 6 Elements of Cost Direct Cost Elements –Labor estimates are provided from technical team stating period of performance, performing division, performing location (Stanley site or customer site), and corresponding labor category –Material inputs –Travel and living inputs If Applicable (Danger Pay, Completion bonus, Living quarter allowance, Differential pay) Indirect Cost Elements –Burdens include: Fringe Overhead (Site or Off-Site) General & Administrative Material Handling

7. COMMITMENT, INTEGRITY, RESULTS 7 Cost Proposal Preparation & Delivery Pricing Department Activities –Review RFP for type of contract –Review RFP for costing requirements –Submit questions to Customer for RFP clarification –Update proposal costing schedule –Conduct Cost Kickoff Meeting –Update and maintain responsibility assignment matrix –Compile cost spreadsheets for initial review –Develop cost narrative tailoring to special RFP requirements –Review cost volume for compliance to RFP Required from Proposal Team –Go/No Go decision –Cost input (BOEs) –Subcontractor work-share –Graphics support –Program schedule –Subcontract teaming agreements –Material Estimates –Travel Estimates

8. COMMITMENT, INTEGRITY, RESULTS 8 Cost Proposal Preparation & Delivery cont. Pricing Department Activities –Review and evaluate subcontractor proposals –Complete cost volume TOC –Complete formal costing documents –Validate cost assumptions match technical approach –Compile final cost volume –Complete final book check of hardcopy –Compile softcopy submission (Burn CD) –Distribute to Proposal Manager Required from Proposal Team –Finalized subcontractor work- share –Final material price list –Binder covers, binder spines, and supplemental Graphics support

9. COMMITMENT, INTEGRITY, RESULTS 9 Sample Pricing Schedule

10. COMMITMENT, INTEGRITY, RESULTS 10 Post Proposal Activity Pricing Department Activities –Provide support in response to questions (Data request, Change request, etc) –Support revised proposal –Maintain cost baseline for tractability –Submit revised proposal –Support program negotiations –Support program startup Required from Proposal Team –Provide support in response to questions (Data request, Change request, etc) –Request for revised proposal –Resubmit per customer request

11. COMMITMENT, INTEGRITY, RESULTS 11 Keys to a Successful Cost Volume Communicate and start early Prepare for obstacles, they will happen Maintain control of cost baseline through all cost changes and updates Ensure consistency between all proposal volumes Remember…A Chaotic Process Erodes Proposal Quality!