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I am a cost analyst. My company gets lots of proposals that include fully burdened rates. We have no visibility into their OH, G&A, etc. Just their fully burdened rates (never even a base rate). We do have labor categories so we are able to go to websites like salary.com, bls, etc. to find comparable base rates. My question is, what do you use to account for the indirect rates when you are checking the reasonableness of a proposed rate? Do you use Global Insight Burdened Wage Calculator? Do you have another way to account for it? This is always the trickiest part of determining the reasonableness of proposed labor. I understand it would be an estimate/ball park way of doing it. Even if it is a tool that uses industry averages for indirect rates. Just need a way/tool that is defensable. Proposed rate for an electrical engineer (including all indirects): $162 Base rate (from salary.com) for an electrical engineer: $54 What tools would you use to estimate/build up the rate from salary.com? Prefereably something that has been looked at/approved by DCMA/DCAA. Any help would be greatly appreciated.
We conduct cost/price analysis on behalf of federal primes and subs and have never flinched in using prior price history as a basis for price analysis (assuming, of course, that the historical price can be substantiated as fair and reasonable as well as a suitable basis in and of itself, a whole other topic of conversation...) Recently, we took a closer look at FAR 15.404-1( (2), which reads as follows: The Government may use various price analysis techniques and procedures to ensure a fair and reasonable price. Examples of such techniques include, but are not limited to, the following: (ii) Comparison of the proposed prices to historical prices paid, whether by the Government or other than the Government, for the same or similar items. This method may be used for commercial items including those “of a type” or requiring minor modifications. Am I reading this wrong or does this say analysis based on historical pricing is only valid for commercial items? Let's say the contractor purchases items which required cost analysis (subject to TINA). Three months later, a new requirement pops up (under TINA threshold but over simplified acquisition). Since these are not commercial items, would this prior procurement and cost analysis not be a suitable basis for determining price reasonableness (of course after adjusting for quantity and passage of time)?
Hi All, Long time reader, first time poster. I'm doing evaluation on a competitive FAR 15 cost-reimbursement contract. Most of the primes have submitted subs providing full cost and pricing detail as required in FAR 15 to determine fair and reasonableness. However, some primes, for some subs, have only submitted T&M loaded rates or in some cases only one amount with no LOE to back it up for what they claim are their commercial subs. During discussions, where additional material was requested in order to determine fair and reasonableness, they claimed that because these subs are proposed as commercial subcontractors, it is not required and pointed to 52.244-6. I've dealt with commercial sub approval at the post-award stage before, but not at the pre-award. Any suggestions on material I should be requesting and am allowed to request in order to determine fair and reasonable cost? Its a very detailed requirement with different approaches, so price analysis is not really applicable.
I will just be direct with this one. I am witnessing an oddly organized technical analysis function and am trying to make sense of it. The contract in question is an established cost type contract which includes an FPRA. Work is added to the contract generally by way of specification formation for a number of work items which make up a base work package, request for cost proposal, negotiated agreement, and finally a bilateral contract modification. The process that occurs between cost proposal and negotiation position formation is the technical analysis function. The cost proposal is at the per work item level (a work item may be a particular alteration of an existing system, an inspection of a piece of major equipment, the complete replacement of some structure, etc.). The cost proposal is detailed across each major cost element of direct labor, subcontracts, materials, and ODCs. The proposal at the work item level is rolled up into a proposal pricing summary which provides a summary of the number of direct labor hours factored against the labor rate, materials, and subcontracts which arrives at the total proposed cost inclusive of labor overhead, G&A, FCCOM, incentive fees, and award fee. The culmination of work items comprises the base work package. The technical analysis of the contractor's cost proposal is very intensive and uses a variety of techniques including price analysis, cost analysis, cost realism analysis, and technical analysis across each major cost element (direct labor including straight time and overtime, subcontracts, materials, and ODCs). The intent of this analysis is to recommend negotiation positions to the KO and as appropriate recommend acceptance of proposed costs and state the basis for establishing price fair and reasonable. So this is a really comprehensive proposal and really comprehensive analysis. So the question is two-fold: 1) Is it customary or acceptable in Federal contracting for the technical experts conducting the technical analysis at FAR 15.404-1 ( e ) to be outside of the project team actually managing the project? And is customary or acceptable for these technical experts to report to the chief of the contracting activity rather than to the program manager? 2) Is it customary or acceptable in Federal contracting that the technical experts and the project team will routinely disagree on the technical position which will be provided to the Contracting Officer and for the Contracting Officer to be discouraged and prohibited from requiring the technical experts and project team to reach consensus prior to forming the negotiating position?