COST PROPOSAL
Mahnke Consulting helps clients plan and create Cost Proposals with adequate FAR-compliant documentation for pricing.
Source Documents to Polished Volume
Your proposal team can add the value of our diverse successes. We guide proposal preparation for a typical cost proposal based on an approved Accounting System, input from diverse functions, and the initial build-up of projected costs, or development of a special proposal:
- Historical Incurred Cost Submission (ICS Model) or application for proposed (forward pricing) indirect rates;
- Response to a specific Request for Proposal (RFP);
- Termination for Convenience (of the customer), with work in process or undelivered goods;
- Request for Equitable Adjustment (REA) after the customer directs a change in the work, methods, and/or deliverables; or
- A claim for an award on which circumstances differed from those contracted.
We bring a wealth of applicable knowledge to planning, creating, and adequately documenting proposals.
A “rehearsal” gives staff time to adopt compliant practices.
Capabilities
Calculation or recalculation of indirect rates is based on the increased volume anticipated by the subject award, unless forward pricing rates (negotiated with the Administrative Contracting Officer) are in place. Although final proposed rates are the responsibility of management, guidance and explanations help develop rates, which recoup all compliant costs as quickly as possible. Advice on supporting these rates and the exclusion of unallowable costs minimizes customer-audit time.
Future cash-outlays for commitments already in place are allowed on awards terminated for the convenience of the customer. This is unique to terminations and does not apply to costs absorbed on substituted jobs. Support demonstrates expenses unique to the terminated work, for goods or services not useable elsewhere.
Averaging labor rates by category builds the basis for proposed labor rates. The cost proposal is a best estimate; some employees will be transferred, terminated, and hired. Individual rates are used only for key employees, those for which substitution may not be made without customer approval. Advice on ways to support local and off-site rates, plus annual escalation, minimizes customer-audit time.
Pricing Material and Other Direct Costs uses: history for the same or similar items (in like quantities); newly acquired, competitive quotes; adequately detailed negotiation memoranda; and other justifications of sources and of prices.
A sole/single source GovCon cost proposal submitted for a Fixed Price award generally requires adequate cost or pricing data. Other contract types sometimes require cost or pricing data. Cost or pricing data is supported by documentation, or an audit trail; information is gathered first, and the proposed costs built up, based on that information. Documentation shows compliance with the Federal Acquisition Regulations (FAR) and other solicitation/contract terms and conditions. Because the contractor certifies compliance, the burden of proof (that cost or pricing data is compliant with FAR and other terms and conditions) is on the contractor.
A cost proposal might be submitted in response to a solicitation for a new program; a contract modification or subcontract change order for changed/new work on a current program; a claim for (requested/required) work performed but not formally included in the contract; or a termination (or partial termination) of the program. The cost proposal typically forms a base for the proposed price, which includes the profit or fee.