NCMA SEBPricing Workshop

1
NCMA SEB/Pricing Workshop

• Jose Garcia
• September 2004

2
Content

• SEB pricing process
• Cost realism probable cost adjustments
• Offerors proposals Observations
• Efficiencies
• Independent Government Estimate (IGE)

3
(No Transcript)
4
The SEB Pricing Process

• What is done with your cost/price proposal once
  it is submitted
• Request a DCAA (Defense Contract Audit Agency)
  audit on all prime offerors and their major
  subcontractors
• Read all narrative basis of estimate and
  understand estimating methodology
• Validate that each offerors provided pricing
  model (prime and each sub) is functional and
  error free
• Integrate and automate all pricing models into
  separate prime team models (one for each prime)
  to facilitate probable cost adjustments
• Test model for errors to ensure consistency with
  proposed approach
• Make probable cost adjustments and assess cost
  realism mission suitability off-set
• Develop pricing presentation charts for SSA
  (Source Selection Authority) showing proposed,
  probable, delta and mission suitability off-set
  as well as rationale for adjustments

5
Cost Realism Probable Cost Adjustments

• Errors and reconciliations
• Labor
• Incumbent labor rates/salary assumptions, if
  proposed
• Escalation
• Productive factor
• Uncompensated/compensated overtime
• DOL wage determination compliance
• DCAA input
• Non-technical in-house analysis (indirect cost,
  DOL WD fringe compliance, etc)
• Technical analysis (FTE quantity, skill mix,
  non-labor resources)

6
Offerors Proposals Observations

• Incumbent offerors not bidding to the
  solicitation
• Need to ensure that their proposal reconciles to
  the solicitation and not the current requirements
• Dont make assumptions if differences exist, ask
  questions when appropriate and understand the
  differences
• Proposals with omissions
• All offerors may consider working to a checklist
  of requirements in Section L to ensure no
  omissions
• If the Government is requiring information you
  may not be able to provide, ask questions
• Proposals with references to old or other Agency
  solicitations
• Lack of adequate supporting rationale in
  narrative form
• The basis of any estimate needs to be explained.
  Be specific and objective (technical resources,
  efficiencies, and cost estimates)
• Lack of reconciliation between different areas of
  the proposal
• The technical and management approach should be
  consistent with each other and the staffing and
  respective cost should reflect those approaches

7
Proposed Efficiencies

• If efficiencies are proposed related to staffing
  reductions, ensure that the gap between the
  baseline and the proposed staffing is adequately
  explained numerically as well as in narrative
  form.
• If an efficiency of 10 FTE is proposed at the
  onset of the contract do not automatically assume
  that the same efficiency will save an additional
  10 FTE for each of the out years. Explain the
  initial FTE savings and any additional savings in
  all out years.
• Goal efficiencies proposed shall be realistic,
  adequately supported and reconcilable to the
  technical management approach.

8
Efficiencies should explain this gap.
This gap needs to be explained in terms of
efficiencies or cost savings.
Basis of estimate should explain this gap.
9
Independent Government Estimate (IGE)

• IGE for FTE (Full Time Equivalents) and the skill
  mix is published in solicitations.
• IGE represents the governments best estimate to
  satisfy the requirements and does not necessarily
  represent current or historical experience.
• IGE FTE and skill mix represent total estimated
  personnel (direct indirect) to satisfy
  requirements.
• The IGE does not represent a ceiling or a
  baseline. If you believe a WBS requires
  additional FTE over the IGE, dont simply lower
  other areas to compensate.
• Even if the IGE is proposed, all proposed FTE
  levels should adequately support the proposed
  technical management approach.