APPENDIX E - COST PROPOSAL NARRATIVE.pdf

APPENDIX E: COST PROPOSAL NARRATIVE

The purpose of these Guidelines is to provide guidance to Offerors regarding the budget preparation, and preparation of the electronic Cost Proposal Template, APPENDIX F, and providing Offerors a standard format for proposing costs and pricing when submitting proposals.

All costs proposed in the budget are subject to the cost evaluation criteria established in this solicitation. Payment and budget terms will be subject to the final terms, conditions, and award of a contract.

Allowable Cost Guidance

The Office of Management and Budget (OMB) “Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards, Final Rule (Uniform Guidance) from December 26, 2013”; 2 CFR Part 200 (Omni Circular) provides guidance with regard to certain items of costs, including information as to whether certain types of indirect costs are allowable or unallowable.

Common unallowable costs categories described in the Omni Circular include (but are not limited to): fundraising costs, investment management costs, donation/contributions made by the vendor, fines and/or penalties, costs of goods and/or services purchased for the personal use of provider employees or officers, amortization or expensing of current or prior capital losses other than depreciation, cost of goods and services that would be procured by self-dealing or related party transactions unless it is affirmatively shown that the costs of such is no greater than what the same would have cost when procured independently, lobbying and advocacy costs, and noncapital debt interest cost (capital debt interest and principal cost for an asset may be included if the provider does not include a use or depreciation allowance for such asset in its fee basis). General selling, marketing, promotion, and public relation costs are typically unallowable except to the extent that they are expected to be incurred solely because they are required for the provider to perform the scope of work proposed.

Administrative Support costs are known as indirect costs. Indirect costs are those associated with operating a contractor’s business and which are not easily or directly associated with a particular service. The electronic cost report template will allow the vendor to estimate a percentage to be applied as the indirect rate. The submission must detail what activities and costs are included in the indirect rate. Certain indirect costs may not be allowable for allocation to the contractor’s rate proposed to DCYF. The contractor should list any indirect costs related to this contract, and the contractor must describe the formula used to allocate those costs to the service being proposed in the budget narrative. It is anticipated that indirect costs will not exceed 10% of the contract award, however, if the indirect rate is in excess of 10%, the vendor should provide clarity and reasoning in the submission. Further, if the contractor has a federally approved indirect cost letter, a copy of the letter is required with submission.

Guidelines for the Electronic Cost Proposal Budget Template (referred to as the Electronic Template) Completion

The attached electronic template consists of eight (8) worksheets, which, when completed, comprise a complete budget for inclusion in the Cost Proposal.

1. Summary

The Summary Worksheet details the contractor’s vital information, to include the provider’s (the agency’s) name, Dun and Bradstreet (or DUNS) number, etc The Summary Worksheet also displays the key contract budgetary line items and associated values, based upon the calculations performed in the detail worksheets. It instructs vendors on calculation of an Effective Daily Rate.

The summary sheet is formatted to extract data from all subsequent sheets, therefore in the areas shaded gray (the excel cells) on the Summary Worksheet, Vendor Input is required.

Upon submission, the Summary worksheet should be submitted as a PDF, while the document as a whole should be submitted in excel.

2. Definitions

The Definitions Worksheet includes common terms and phrases, along with the applicable definition that should be utilized when filling out the electronic cost proposal. All terms can be sorted and filtered by Function, Title/area, Description, and Guidance. The Vendor must review the definitions to successfully complete the electronic cost proposal. proposal.

3. Cost Element A – Labor

The Personnel worksheet provides the Department with an understanding of the costs contained within necessary personnel to deliver the proposed program. The provider shall list every job classification which the Offeror is proposing for the service. All job classifications are defined in the definition’s worksheet, as discussed above.

The staff to be entered in the Personnel worksheet includes direct care staff who help youth with the everyday tasks and care and give specialized services to the youth. This section includes, but is not limited to, all direct staff, including program director, program management, program workers, medical and nursing personnel, and if any education program staff. Due to the population DCYF needs to serve as described within this RFP, many services will be clinical in nature. Please note the clinical staff includes clinicians and social workers. This worksheet requests the contractor to itemize the specific professional categories and describe the quantity of each labor category required, along with the hourly wage or annual salary paid for that labor category.

Benefit expenses referred to in this worksheet are those costs associated with employing direct staff. This includes pay roll taxes; workers compensation insurance, Medicare, etc.

and fringe benefits; as well as life insurance, pension, tuition benefits, and other non-salary/wage benefits. The fringe rate should be explained on a separate page in of the budget narrative.

Please note that with respect to educational costs, only those facilities authorized by Rhode Island General Law to be reimbursed by DCYF for more than the per pupil Special Education rate provided by the youth’s Local education Authority shall build a rate including the cost of education to be paid by DCYF.

The worksheet includes the following Personnel Categories: Management, Medical, Nursing, Specialty, Education if applicable, Clinical, Direct, Consultants. Each of these categories are defined in the Definitions Worksheet. The provider will identify each job title by the personnel category. The vendor will need to provide inputs for wages/salary, Full-time Equivalent Positions, and an estimated personal benefit percentage.

4. Cost Element B – Materials & Program Supplies

Program materials, supplies, curriculum, printing, and other consumable materials.

Separates material costs from personnel and direct service expenses.

5. Other Direct Cost

Other Direct Costs such as transportation, youth supports, software, housing assistance, meeting costs, mentoring costs, and similar direct program costs.

Captures direct costs necessary for service delivery that are not labor or materials.

6. Indirect Cost

Indirect cost categories, allocation bases, rates, and calculated indirect costs.

Documents organizational support costs and allocation methodology. As stated previously, Administrative Support comprises indirect costs that relate to a provider’s overall operations. The indirect allocation formula should be explained on a separate page in the Budget Narrative. Typical costs include, but are not limited to, executive, administrative support, accounting and audit fees, professional insurance, human resources, information technology, etc. This worksheet requires the contractor to estimate the administrative support rate allocated against the expenses under the proposal.

7. Budget Crosswalk

Informational-only link between major RFP service areas and budget categories/tabs.

Helps evaluators understand how proposed resources support required service areas.

8. Budget Narrative

Cost assumptions, methodologies, rate explanations, subcontractor explanations, and justification of reasonableness.

Supports review of whether costs are reasonable, necessary, allowable, and allocable.

APPENDIX E: COST PROPOSAL NARRATIVE