This document provides information about a webinar series on federal government contracting hosted by JSchaus & Associates. The webinars are held every Wednesday and cover topics like pricing, working with veteran-owned small businesses, and advertising opportunities. An upcoming webinar on November 4th will discuss the perils of getting pricing wrong, including impacts to profitability, cost proposals, and budgeting. Incorrect pricing can also lead to defective pricing findings from audits.

1. FED GOV CON
Webinar
Wednesdays
2020 Series
JSchaus & Associates
Washington DC
+ 1 – 2 0 2 – 3 6 5 – 0 5 9 8

2. About Our Webinars:
- Every Wednesday;
- Complimentary;
- Recorded;
- YouTube & our Website;
- No Questions

3. The National Veteran Small Business
Coalition (NVSBC)
is the largest non-profit trade association
in the country representing veteran and
service-disabled veteran-owned small
business in the federal marketplace as
prime and subcontractors. NVSBC
provides networking, match-making,
coaching, and training opportunities for
members.
Please visit: www.nvsbc.org

4. About Us:
Professional Services for
Federal Contractors
- GSA Sched;
- SBA 8(a);
- Proposal Writing;
- Pricing;
- Contract Administration;
- Business Development

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Includes Government &
Government Contractors
Hello@JenniferSchaus.com

6. Our 2021 Webinar News

7. Our 2021 Webinar News

8. Our 2021 Webinar News

9. About Our Speakers:
Traci Shepps
trowland@cordiapartners.com
Brigitta Scott
bscott@cordiapartners.com
Company Name:
Cordia Partners
Company Website:
www.cordiapartners.com

10. The Perils Of Getting
Pricing Wrong
Wednesday,
November 4, 2020

11. The Perils of Getting Pricing Wrong
presented by
2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates

12. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
IMPACT ON
Profitability
Cost
Proposal
Budgeting
/Planning

13. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Impact on the Cost Proposal
• Final proposal cost
• Competitive position (impacts win/loss)
• Could raise questions regarding overall contract
pricing (too low vs. competitors)
• Could raise concerns regarding defective pricing
(more on that later)
Cost
Proposal

14. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Impact on Profitability
• Lower Gross Margins, lower Net Income
• FFP and T&M contracts: limited avenues to
correct, impacting overall profitability
• Cost reimbursable contracts: will immediately
show a variance that will need to be explained
Profitability

15. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Impact on Budgeting/Planning
• Forecasting will be impacted as real cost may vary
greatly (up or down) from expectations
• Forward pricing rates may be impacted
Actuals vs. Budget variances
• Explaining to Corporate Management
Budgeting/P
lanning

16. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Possible Defective Pricing
• Truthful Cost or Pricing Data statute (still commonly referred
to as the Truth in Negotiations Act or TINA): Establishes
requirements regarding certified cost or pricing data that is
submitted by contractors in support of proposals submitted
to the government or to government contractors.
• Certified cost or pricing data is required, in certain
circumstances (FAR 15.403-4)

17. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Possible Defective Pricing
• When auditors can prove that certified cost or pricing data
was not current, accurate, or complete, a finding of defective
pricing can result. FAR 15.407-1 states that such a finding will
result in an adjustment to contract price.
• The government is also entitled to recovery of any
overpayment plus interest, and to penalty amounts related to
overpayments.

18. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Possible Defective Pricing
• Companies may face a potential negative perception the
government has of companies found to have submitted
defective certified cost or pricing data.
• If the government can prove fraudulent intent, the personnel
involved could face criminal prosecution

19. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Possible Defective Pricing
• Contract type is an important consideration of DCAA
engagements Interest begins when payments are first made
to the contractor on any fixed amounts that are determined
to be defectively priced.
• For Cost Plus Fixed Fee contracts:
Limited to payments of fee if it is determined that the fee was
overstated based on defective pricing.

20. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Possible Defective Pricing
• For Fixed Price contracts:
 Interest begins with the first payment related to any part
of the contract that is determined to be defectively priced.
 Are the highest risk, as they have the highest potential
contract price adjustment.

21. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Root Causes of Getting Pricing Wrong
• Defective pricing audit activity:
 Necessitates that contractors examine their controls
related to preparation of certified cost or pricing data.
 Controls should be sufficient to enable the certifier to
confidently conclude that the data submissions are
current, accurate, and complete as of the date of
negotiations.

22. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Root Causes of Incorrect Pricing
• Proposing positions that cannot be filled at the budgeted
salaries
• Poorly developed indirect expense budgets: impact
rates/incorrect WRAP
• Basis of estimates that have gaps that are not addressed
• Assumptions on workload and costs that are not realistic

23. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Root Causes of Incorrect Pricing
• Cost reductions to attain the perceived winning price
• Inadvertently leaving out cost data
• Mistakes in calculations

24. 2020 – Fed Gov Con Webinar Series - Washington DC
JSchaus & Associates
Steps to Avoid Pricing Issues
Sanity check
on all proposal
requirements
Determine what
the expected
gross margin and
net income would
likely be before
actual pricing
Review of all
calculations by
another set
of eyes
Ask yourself:
Does it seem
realistic?
1 2 3 4

25. THANK YOU!
JSchaus & Associates
Washington DC
hello@JenniferSchaus.com
www.JenniferSchaus.com
+ 1 – 2 0 2 – 3 6 5 – 0 5 9 8
Traci Shepps
trowland@cordiapartners.com
Office: 703.462.6206 | Cell: 703.615.7999
Brigitta Scott
bscott@cordiapartners.com
Office: 703.962.9560 | Cell: 703.618.6364