This document discusses price-cost analysis as it relates to contracting for the Army. It notes the following key points: 1) There have been realignments of program management offices, contracting agencies, and contracting vehicles that impact price-cost analysis. 2) Price-cost analysis is important for cost proposals, invoices, contract closeouts, and reconciliations. It ensures reasonable indirect cost rates and fees. 3) A diagram is presented showing the relationships between the contracting officer's segment and comptroller's segment of the contract lifecycle, including the requirements, administration, closeout, and important reconciliation phases. 4) Issues that can arise include anti-deficiency act violations, limitation of

1. CLC Price-Cost Analysis
Phil Borja
7/20/2016

2. $ Big Picture Impacting P-C Analysis
Omnibus … Designated in 2015 by Office of the Assistant
Secretary of the Army (AL&T) as the Army Strategic
Sourcing Active Initiatives “Preferred Source”
• Realignment of PMO leadership (NHRC to DHA; ACC to
DHA)
• Realignment of PCO contracting agencies (ACC-APG
NCD, DHA, DOI, and USAMRAA)
• Realignment of contracting vehicles between ACC
Omnibus, stand-alone FOREIGN contracting vehicles
(SABER, OSIRUS, GLOBE, etc.), USAMRAA’s Medical
Product Research & Development (MPRD) master
vehicle, GSA (for example, OASIS), and DHA/DOI
(COBRA)

3. Contract Life Cycle
Price-Cost Analysis
As it pertains to:
• Cost Proposal
• Invoices
• Closeouts
• Reconciliation

4. Basis for CLC Price-Cost Analysis
(Interrelationships)
10.28.2015
BOUCHARD-MONTENEGRO DIAGRAM
Like the discovery of a new planet at the edge of our solar system, a new phase at the edge of the acquisiton cycle has been discovered that brings new significance to the Comptroller
reconciliating the Government's accounting books and a new found explanation to the significance of the anomalies associated with the Limitation of Cost letter, Cost-Plus Fixed-Fee term (level of
effort) or completion, and Firm-Fixed-Price defective pricing. The existence of the Reconcilation Phase has been historically obscured by the DCAA backlog (see GAO-13-131 Report).
A B C D E
Contracting Officer's Segment
F G H I J K L
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
SEGMENTS
Comptroller's Segment
Consideration of term
(level of effort) or
completion & CPFF or
FFP
Limitation of Cost Letter (or
contractor's due)
DCAA Final Indirec Cost Rates
Funds Cancel
(Judgement Day)POP Start
Quicksand Region
Notice to Proceed
Award CPFF or FFP Initiatives
First Contact POP End Contract Closed Last Contact
MILESTON
ES
PHASES
Requirements Phase Admin Phase Closeout Phase Reconciliation Phase
ACTIONS Unresolved Liability Action
CPPF Initiative allows for
earlier fiscal actions
Fiscal Action
Reconciliation & Settlement Action
Notes:
Dashed lines indicate movement to the left or right.

5. B-M Diagram
Four phases:
Comptroller
KO
• Requirements Phase √ √
• Reconciliation Phase √ √
• Admin Phase √ √
• Closeout Phase √ √

6. Cost Proposal
For Cost-Plus Fixed-Fee or Firm-Fixed-Price type task
orders:
• Direct Labor – Price Realism … For example, client
going to pay GS-11 pay for a journeyman level
engineer.
Indirect Cost Rates – Price Reasonableness … For
example, it is what it is; avoid discounting; avoid
defective pricing .. Certification of cost or pricing
data.
•
For CPFF type task orders:
• Fee for Profit – Completion versus Term … Completion
is guaranteed (except LOC); Term is commensurate.

7. Invoices
Awarded Estimated Cost
CPFF type task orders
• Anti-deficiency Act violations
• Limitation of Cost violations
Awarded Fixed Fee
FFP typed task orders
• Unit violations
• Service Entry Sheet exception allows for
multiple billings

8. Closeouts – Feedback Loop
Termination Specialist
• Preliminary negotiations using Contract Brief document
… resolution of residual Fixed Fee (completion versus
term)
Completed negotiations using Bilateral Settlement Mods
… resolution of indirect cost rate variances (claimed
versus final)
•
Price-Cost Analyst
• Cancelling funds more prevalent … negative impact on
client
Cost-Plus Fixed-Fee Initiative – picked up the pace using
DCAA claimed rates rather than DCAA final rates …
balance the Comptroller’s books
•

9. Reconciliation … Huge Liability
Comptroller’s books:
• Accounting systems don’t match (STARS
versus DFAS)
• Invoice units used up (no Service Entry Sheet)
• Funds cancelled with outstanding debt
• Funds deobligated without proper
documentation
• Anti-deficiency Act violations not addressed

10. Follow-up Briefings/Classes
Phillip Borja
phil.borja@gmail.com
619.823.9459 (San Diego Time Zone)