1.
Competitive Cost &
Price Analysis

2.
Robert E. Jones
Government Contracts & Accounting Expert
CPA, CPCM, NCMA Fellow
Meet your presenter:
• Robert has over 15 years of Department of
Defense contract and accounting experience.
• He has successfully managed over $30 million
in federal contracts and has a 100% success
rate for all audits he has helped support.
rjones330

3.
Melissa Metzger
Government Accounting & Finance Advisor
MAFM
Meet your presenter:
• Melissa has successfully developed and
instituted compliant and efficient processes
that have saved businesses over $1.5 million
during the last 5 years.
• She has successfully managed over $100
million in annual federal funds.
Melissa-Metzger-mafm

4.
Today we’ll learn:
How to help the contracting officer make a determination
of fair and reasonable prices.

5.
“We can complain because rose
bushes have thorns, or rejoice
because thorns have roses.”
~ Alphonse Karr
French critic, journalist, and novelist

6.
Learning
Objectives
1. Identify and collect all costs
associated with a product or
service
2. Calculate and allocate indirect
rates
3. Present cohesive and logical
cost and pricing support

7.
Room Poll
Are you currently working on government contracts?
• Yes
• Not yet - we need help!
• Not interested

8.
Identify & Collect
All Costs
Direct
Indirect
Fringe
Overhead
G&A

9.
Direct
Labor
Materials
Travel
ODC
Subcontractors

10.
Indirect
Fringe
Overhead
G&A
Unallowable

11.
Fringe
Costs of maintaining employees
• Employer Taxes
• Health Insurance
• Retirement
• Paid Absences

12.
Overhead
Costs of supporting customers or products
• Customer/Product Support
• Facilities
• Labor & Personnel
 Training
 Overtime Premium
• Supplies & Equipment
 Operating Supplies
 Depreciation
 Repairs & Maintenance
• Travel

13.
General & Administrative (G&A)
Costs of operating the business
• Labor & Personnel
 Training
• Office Supplies
• Business Development
• Licenses
• Taxes
• Travel

14.
General & Administrative (G&A)
Costs of operating the business
• Professional Services/Fees
 Accounting
 Human Resources
 Information Technology
 Legal

15.
Room Poll
Is your general ledger (G/L) currently organized into cost
pools?
• Yes
• No - not needed
• Not yet - we need help!
• Unsure

16.
Calculate & Allocate
Indirect Rates
Fringe
Overhead
G&A

17.
Fringe
Base
All W-2 labor
Allocation Methods
• Labor Dollars (most common)
• Labor Hours

18.
Overhead
Allocation Methods
• Units of Production
• Direct Labor Hours
• Direct Labor Dollars
• Direct Material Dollars
• Prime Costs
• Machine Hours

19.
General & Administrative (G&A)
Allocation Methods
• Total Cost Input (TCI) – most common
• Value Added
 = TCI – Materials & Subcontracts
 Default when using Material & Sub Handling

20.
Room Poll
How do your rates compare with others in your industry?
• We're higher
• About the same
• We're lower
• I don't know

21.
Present Cohesive &
Logical Support

22.
Follow RFP Instructions
File format
Excel vs PDF
FAR Table II
Hours & Dollars
by Labor Category
by CLIN
by Year (time phased)

23.
Provide Complete Details
Provide all information requested
Fixed price
• Should only be top-level price
• May ask for price by CLIN or item, but should not be cost elements
Cost-type
• Base labor and material costs
• Details of Fringe, Overhead, and G&A

24.
Verify the Math
Have an outsider verify the math
Ensure columns foot and cross-foot
Ensure supporting documents match
Ensure supporting tables tie to summary

25.
Room Poll
Do you need help with cost and pricing?
• Yes – please hurry!
• No – we’re experts
• Unsure

26.
Discussion
and Q & A

27.
www.LeftBrainPro.com/rccd-cost-19
Connect with
us
Download the presentation
Left Brain
Professionals Inc.
@LeftBrainPro
@LeftBrainPro

28.
Melissa R. Metzger
MAFM
melissa@leftbrainpro.com
Robert E. Jones
CPA, CPCM, NCMA Fellow
robert@leftbrainpro.com