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Effective Government
Cost Proposals
There are several
different types of
government contracts.
Each has advantages
and disadvantages.
Contract
Types
#1
•  Fixed Price – Set
amount for goods
or services.
•  Cost support
requirements:
Low
#2
•  Time & Material – Set rate for labor per
labor category, number of units (hours)
are variable.
•  Cost Support requirements: Medium
#3
•  Cost Plus – Direct and indirect
costs (dollars) incurred are
variable, must be reconciled
before contract closeout
through audit, quality of records
is vital
•  Cost Support requirements:
High
Proposal Management Tools
•  Compliance Matrix
•  Milestone / Timeline
•  Response Checklist
Compliance Matrix
•  Read RFP – Add
anything related to
pricing.
•  Identify questions that
you may have for
government
•  Obtain amendments,
Q&As – add anything
related to pricing
Identify tasks, including:
•  Due dates
•  Responsible organizations
•  Responsible parties
•  Response location
•  Pricing strategy issues
Milestone / Timeline
Response
Checklist
•  Identify all items that must
be included in the cost
proposal response.
•  Check off when
completed.
Defending Price – Supporting Documentation
Direct Labor:
•  Payroll Reports / Check stubs
•  Contingent Hire Agreements
•  Labor Surveys, Wage Determination
•  Internal Labor Rate Matrix
Defending Price – Supporting
Documentation
Subcontractor Costs:
•  Subcontractor cost proposal
•  Subcontractor quotes
•  May have to include a rate analysis to support
reasonable subcontractor cost proposal
Defending Your Pricing –
Supporting Documentation:
Travel Costs
•  Airfare Quotes
•  Joint Travel Regulations (JTR)
•  Hotel
•  Per Diem
•  Mileage
Defending Your
Pricing –
Supporting
Documentation
Indirect Costs:
•  Annual direct and
indirect rate
budget
•  Include the entire
period of
performance of
contract
•  Factor in the
direct costs of the
contract in
preparing the
proposal budget
and calculating
the proposed
indirect rates
Wrap Rates
•  AKA: Multiplier / Load / Cost Factor
•  A method of relating the mark-up over labor
•  Ideally, you would know what is competitive
for the procurement
•  Proposed wrap rate needs to be a number
that is consistent with corporate strategy
and you can live with.
Questions?
Contact KDuncan & Company
www.kduncan.com
info@kduncan.com
301-608-3200

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Effective Government Cost Proposals

  • 2. There are several different types of government contracts. Each has advantages and disadvantages.
  • 3. Contract Types #1 •  Fixed Price – Set amount for goods or services. •  Cost support requirements: Low
  • 4. #2 •  Time & Material – Set rate for labor per labor category, number of units (hours) are variable. •  Cost Support requirements: Medium
  • 5. #3 •  Cost Plus – Direct and indirect costs (dollars) incurred are variable, must be reconciled before contract closeout through audit, quality of records is vital •  Cost Support requirements: High
  • 6. Proposal Management Tools •  Compliance Matrix •  Milestone / Timeline •  Response Checklist
  • 7. Compliance Matrix •  Read RFP – Add anything related to pricing. •  Identify questions that you may have for government •  Obtain amendments, Q&As – add anything related to pricing
  • 8. Identify tasks, including: •  Due dates •  Responsible organizations •  Responsible parties •  Response location •  Pricing strategy issues Milestone / Timeline
  • 9. Response Checklist •  Identify all items that must be included in the cost proposal response. •  Check off when completed.
  • 10. Defending Price – Supporting Documentation Direct Labor: •  Payroll Reports / Check stubs •  Contingent Hire Agreements •  Labor Surveys, Wage Determination •  Internal Labor Rate Matrix
  • 11. Defending Price – Supporting Documentation Subcontractor Costs: •  Subcontractor cost proposal •  Subcontractor quotes •  May have to include a rate analysis to support reasonable subcontractor cost proposal
  • 12. Defending Your Pricing – Supporting Documentation: Travel Costs •  Airfare Quotes •  Joint Travel Regulations (JTR) •  Hotel •  Per Diem •  Mileage
  • 13. Defending Your Pricing – Supporting Documentation Indirect Costs: •  Annual direct and indirect rate budget •  Include the entire period of performance of contract •  Factor in the direct costs of the contract in preparing the proposal budget and calculating the proposed indirect rates
  • 14. Wrap Rates •  AKA: Multiplier / Load / Cost Factor •  A method of relating the mark-up over labor •  Ideally, you would know what is competitive for the procurement •  Proposed wrap rate needs to be a number that is consistent with corporate strategy and you can live with.
  • 15. Questions? Contact KDuncan & Company www.kduncan.com info@kduncan.com 301-608-3200