Attachment_8_-_STRAFE_-_Cost_Proposal_Instructions _dated_02_Jun_2014.pdf

Det 8 AFRL/RVK Cost Proposal Instructions

Revised: 2 Jun 2014 Page 2 of 8

COST PROPOSAL ADEQUACY AND STRUCTURE

1. GENERAL INSTRUCTIONS:

a. In response to this Broad Agency Announcement (BAA), the offeror shall prepare and submit certified cost or pricing data and supporting attachments in accordance with Table 15-2 of FAR 15.408.

Further, the offeror shall utilize the DFARS 252.215-7009, Proposal Adequacy Checklist (PAC), in pre-submission proposal quality reviews, and furnish the completed checklist as part of their proposal submission.

(1) The responsibility for providing a well-prepared and fully supported cost proposal lies solely with the offeror. The basis and rationale for all proposed costs shall be provided as part of the proposal so that the Contracting Officer (CO) has the information necessary to evaluate the reasonableness of the proposed price.

(2) If the offeror is unsure as to whether a checklist item is required in support of the proposal, or how to adequately comply with a checklist item, the offeror shall contact the Contracting Officer as soon as possible after receipt of the BAA, but in any case prior to proposal submittal, to resolve the questions.

(3) Non-compliances with the DFARS Proposal Adequacy Checklist and the additional requirements of these instructions will require immediate correction. However, completion of the checklist does not relieve the offeror from the responsibility to comply with all applicable regulations and any special requirements of the solicitation.

(4) The offeror is encouraged to flow down these instructions to subcontractors/affiliates required to submit certified cost or pricing data in support of this BAA. (Except as used in paragraph 2.j., Commercial Item Considerations, the term subcontractor excludes commercial suppliers or vendors excepted from providing certified cost or pricing data.)

b. The offeror is advised that the contracting officer may find costs associated with revision/rework of inadequate cost proposals unreasonable, and will consider the nature and extent of any proposal inadequacies when assessing/negotiating profit. NOTE: In accordance with DFARs 215.404-71-2(e)(3)(i), poor quality, untimely proposals, failure to provide an adequate analysis of subcontractor costs, hindrance of the evaluation and negotiation of the proposal, a marginal estimating system, and submission of an inadequate proposal will adversely impact the assignment of values under weighted guidelines and the resultant fee amount.

c. In order to preclude delays in negotiations and contract award, the completed PAC submitted with the proposal shall provide a clear explanation for any checklist items not included in the proposal, particularly items not provided based on any of the five exceptions to the Truth in Negotiations Act (TINA) found at FAR 15.403-1(b).

d. Cost Proposal Requirements. In addition to the requirements identified in the DFARS PAC, the following also apply to the cost proposal submitted in response to this BAA.

(1) Breakout by Year. If the proposal includes more than one priced CLIN, the proposal shall include a breakout of CLIN prices by cost element by Contractor Fiscal Year (CFY). The proposal shall define the timeframe of the Contractor Fiscal Year (for example, January – December).

Revised: 2 Jun 2014 Page 3 of 8

(2) If the proposal includes more than one priced CLIN, recurring/non-recurring costs shall be identified for each priced CLIN.

(3) Provide complete responses to the attached Contractor Information document for the Prime and each Subcontractor. If preferred by the offeror, the responses to the information requested may be provided on a similar form or listed on the first page of the cost proposal. (Attachment 1)

(4) Indicate whether Government approval of respective accounting, estimating, and purchasing systems has been obtained. If so, provide evidence of such approval.

(5) Round all dollar amounts to the nearest dollar. Round all labor rates to the nearest penny.

(6) Furnish Tables 1 thru 4 (sample tables are at paragraph 3 below), or in the contractor’s format containing the information outlined in these instructions, for the entire performance period (supported by rationale required by paragraph 2) in hard copy and on CD as IBM PC compatible as described in paragraph 1.e., Submission Of Electronic Cost Model, below.

e. Submission of Electronic Cost Model. The proposal submission shall include an electronic cost model with active formulas demonstrating the mathematical calculation of the proposed cost (in Microsoft Excel format). The electronic cost model shall include build-up by year of cost in total and by CLIN, consistent with the yearly breakout required by paragraph d.(1) of these instructions, or as directed by the Contracting Officer. The electronic cost model shall roll up to an annual and total program summary by cost element.

All information supporting each CLIN should be visible and verifiable in the electronic cost model. The formulas included in the electronic cost model shall not be locked, and the model shall be editable by the Government. This requirement also applies to subcontracts exceeding the TINA threshold

2. PROPOSED COST ELEMENTS: The detail required for each major cost element is described below.

Address all cost elements applicable to the proposed effort and provide a narrative to support the basis of estimate. Explain the basis of estimate for each cost element to include the basis for proposed rates. As applicable, provide the following information for each cost element. If a portion of the required information is not applicable for a particular cost element, so state.

a. DIRECT COSTS:

(1) DIRECT LABOR:

(a) As part of Table 1, list the proposed hours, rates, and calculated amounts for each direct labor category by OFY, by CLIN. If separately priced CLINs apply, also include a roll-up to Total Program Summary.

(b) As part of the basis of estimate narrative, provide rationale for proposed hours and labor mix.

Explain how the proposed labor hour skill mix has been derived. Explain why the cost element requires an average, higher, or lower than average skill mix. (Information such as historical cost information, judgment, analogy to other similar efforts, etc. is generally accepted as a method of projecting direct labor hours).

(c) Provide the base labor rates for each category. If composite or blended rates are used, provide the calculations used in deriving the composite rates. Identify the source of the proposed rates and

Revised: 2 Jun 2014 Page 4 of 8 explain the methodology used to project each rate for subsequent years. If applicable, identify the proposed escalation factors applied to future estimates and rationale for the proposed factors.

Submit source data for proposed direct labor rates. If evidence of Forward Pricing Rate Agreement (FPRA), Forward Pricing Rate Recommendation (FRPR), or recent DCAA audited direct labor rates are not available for submission, submit the following source data listed in order of preference, current payroll data, or signed employee agreements, or salary survey, etc. to support proposed direct labor rates.

(2) SUBCONTRACTS/INTER-ORGANIZATIONAL TRANSFERS (IOTs): NOTE: Highly recommend the offeror provide these cost proposal instructions to all subcontractors. Fully disclosed Subcontractor/IOT proposals are required for ALL subcontractors (including Tables 1 thru 4), and must be submitted to the government by the closing date identified in this solicitation. It is especially important that adequate data on subcontractors be provided. Rates are particularly important. Note that the absence of adequate data on subcontractors is a frequent source of prime contractor inadequate proposals and avoidable delay in contract award.

(a) As part of Table 1, list each subcontractor/IOT cost separately by OFY by CLIN.

(b) Obtain cost or pricing data from prospective sources for those exceeding the threshold set forth in FAR 15.403-4 ($700,000) and not otherwise exempt, in accordance with FAR 15.403-1(b) (i.e., adequate price competition, commercial items, prices set by law or regulation or waiver).

(c) Provide a list of anticipated subcontractors/IOTs using Table 2.

(d) To ensure compliance with FAR 52.215-22, Limitations on Pass-Through Charges - Identification of Subcontract Effort: Use Table 2 to identify the cost of work to be performed by each subcontractor by contract or task order as applicable. If the offeror subcontracts more than 70 percent of the total cost of work to be performed, comply with the requirements of the provision.

(e) The proposal shall identify those actions where assist audits have been requested by the prime or sub-tier contractors and identify the request date and scheduled receipt date for those audits. The need for assist audits resulting from proprietary data rights assertions at any tier shall be identified to the Contracting Officer as soon as the offeror becomes aware of the need. Government performance of assist audits does not relieve the offeror of the responsibility to accomplish and provide its price/cost analysis of the subcontracts.

(f) Provide an analysis of the proposed subcontract in accordance with FAR 15.404-3(b). Provide an analysis concerning the reasonableness, realism and completeness of each subcontractor’s proposal.

Explain the use of decrement factors if applied. If the analysis is based on comparison with prior prices, identify the basis on which the prior prices were determined to be reasonable. If the subcontract exceeds the TINA threshold and no exception applies, the cost analysis should include, but not be limited to, an analysis of: materials, labor, travel, other direct costs and proposed profit or fee rates. Differences between the subcontractor/IOT proposed amounts and the prime contractor proposed amounts must be fully explained.

(g) In accordance with FAR 15.404, Table 15-2 IIA(1), obtain competition to the maximum extent practicable when selecting subcontractors.

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(h) If the offeror has obtained competitive quotes from potential subcontractors, provide copies of the quotes.

(i) If the offeror has selected other than the low subcontractor bid for inclusion in their proposal or intends to award the subcontract effort on a sole-source basis, provide rationale for that decision.

(j) If the subcontractor is not yet determined, include a list of the tasks to be performed, an explanation of the method used to estimate the subcontract price, and the reason proposals/quotes cannot be requested/provided at this time.

(k) If the proposed subcontractor’s fee rate is higher than the prime’s fee, provide rationale as to why the subcontractor’s risk is greater than the prime’s.

(l) If the IOT is proposed at other than cost, provide support in accordance with FAR 31.205-26(e).

(3) CONSULTANTS:

(a) If the offeror proposes the use of consultants, provide the following FOR EACH NAMED

CONSULTANT:

1. The specific project or area in which such services are to be used.

2. Identification of all cost elements included in the consultant's costs. (i.e.: number of hours, the consultant's rate per hour, plus a detailed explanation of any costs that would be charged over and above labor costs

3. A signed consulting agreement between the offeror and the consultant to include a statement from the consultant that the proposed rate is a "most favored customer rate,” or the reason such a rate was not offered.

4. A determination by the offeror that the rate proposed is comparable to the rates of other consultants doing similar types of work.

(b) In those cases where a consultant IS NOT NAMED but the offeror realizes a need will exist, support the proposed consultant rate by supplying a basis of estimate and source documentation to support the proposed rate.

b. INDIRECT COSTS:

(1) As part of Table 1, list the proposed base, rate/factor and calculated amount for each indirect cost by OFY, by CLIN.

(2) As part of the basis of estimate narrative, identify all indirect cost rates/factors (such as Fringe Benefits, Labor Overhead, Subcontractor/Material Overhead, G&A, Facilities Capital Cost of Money (FCCOM), etc.) and the applicable allocation bases.

(3) Identify the basis of proposed rates (e.g., FPRA and date of agreement, bidding rates and submission date, actual rates and effective date, billing rates and approval date, etc.). Submit source data for all

Revised: 2 Jun 2014 Page 6 of 8 proposed indirect rates. If evidence of FPRA, FPRR, approved Provisional Billing Indirect Rates, or recent DCAA audited indirect rates are not available for submission, submit the following source data in order of preference, certified incurred cost submissions, or budgetary data to include details of the indirect rate cost pools, or supporting historical trend data.

(4) Address whether or not the proposed indirect rates consider a change in Business Base pending award of this effort. Provide support data for the impact to indirect rates if applicable.

(5) If proposing FCCOM, submit a properly executed DD Form 1861. Provide the basis for proposed percentage of land buildings and equipment.

(6) Identify any other indirect cost element being proposed which has not been included above and identify the various cost elements for which the rate is applied.

c. COST ESTIMATING RELATIONSHIPS (CER): All costs proposed on the basis of CERs shall be fully supported. The proposal shall identify the basis for the proposed rate, shall identify the base to which the rate is applied, and shall clearly demonstrate the calculation of proposed costs based on CERs.

d. FEE: Identify the Fee rate(s) and the total Fee cost proposed and identify the various cost elements for which the Fee is being applied. Explain the basis for the proposed rate and application base.

e. NEW MEXICO GROSS RECEIPTS TAX (NMGRT):

(1) It is anticipated that no NMGRT costs will apply to this effort. Effective 01 January 2016, The New Mexico Taxation and Revenue Department (TRD) has implemented a Gross Receipts Tax deduction for Research and Development (R&D) efforts (reference Gross Receipts and Compensating Tax Act 3.2.218 NMCA page 385, http:/www.tax.newmexico.gov/recent-regulation-changes.aspx).

(2) For assistance in determining the extent to which NMGRT may or may not apply contact the New Mexico Taxation and Revenue Department, 5301 Central Ave., NE, PO Box 8485, Albuquerque, NM 87198, (505) 841-6200, http://www.tax.newmexico.gov/Businesses/gross-receipts.aspx.

f. BASELINED OTHER DIRECT COSTS (ODCS) (see CLINs 0002 and 0009): Acknowledge whether the offer complies with the CLIN description of baselined ODCs.

Revised: 2 Jun 2014 Page 7 of 8

3. SAMPLE COST PROPOSAL TABLES (Revise to comply with established accounting practices):

a. Table 1 (Sample): Cost Element Summary. If applicable, list each Subcontractor and IOT separately.

b. TABLE 2 (Sample): SUBCONTRACTORS/IOTs

c. TABLE 3 (Sample): TRAVEL

COST ELEMENT BASE RATE AMOUNT BASE RATE AMOUNT BASE AMOUNT

Direct Labor Labor Category #1 1,200 0 $ 20 00 $ 24,000 1,200 0 $ 20 00 $ 24,000 2,400 0 $ 48,000 Labor Category #2 2,400 0 $ 30 00 $ 72,000 2,400 0 $ 30 00 $ 72,000 4,800 0 $ 144,000 Labor Category #3 600 0 $ 40 00 $ 24,000 600 0 $ 40 00 $ 24,000 1,200 0 $ 48,000

TOTAL DIRECT LABOR 4,200.0 $ 120,000 4,200.0 $ 120,000 8,400.0 $ 240,000

Labor Overhead $ 120,000 50 00% $ 60,000 $ 120,000 50 00% $ 60,000 $ 240,000 $ 120,000 Fringe $ 180,000 20 00% $ 36,000 $ 180,000 20 00% $ 36,000 $ 360,000 $ 72,000

SUBTOTAL LABOR $ 216,000 $ 216,000 $ 432,000

Subcontracts – IOTs $ 200,000 $ 200,000 $ 400,000 Material $ 100,000 $ 100,000 $ 200,000 Material Overhead $ 100,000 3 00% $ 3,000 $ 100,000 3 00% $ 3,000 $ 200,000 $ 6,000 ODC - Travel $ 8,000 $ 8,000 $ 16,000 ODC - Consultants 600 0 $ 100 00 $ 60,000 600 0 $ 100 00 $ 60,000 1,200 0 $ 120,000 ODC - Other $ 3,000 $ 3,000 $ 6,000

SUBTOTAL $ 590,000 $ 590,000 $ 1,180,000

G&A $ 590,000 10 00% $ 59,000 $ 590,000 10 00% $ 59,000 $ 1,180,000 $ 118,000

SUBTOTAL $ 649,000 $ 649,000 $ 1,298,000

FCCOM - Overhead $ 120,000 1 00% $ 1,200 $ 120,000 1 00% $ 1,200 $ 240,000 $ 2,400

FCCOM - G&A $ 590,000 0 10% $ 590 $ 590,000 0 10% $ 590 $ 1,180,000 $ 1,180

FEE $ 649,000 6 00% $ 38,940 $ 649,000 6 00% $ 38,940 $ 1,298,000 $ 77,880

TOTAL COST & FEE $ 689,730 $ 689,730 $ 1,379,460

NMGRT - Kirtland AFB $ 489,730 6 0625% $ 29,690 $ 489,730 6 0625% $ 29,690 $ 979,460 $ 59,380 NMGRT - Albuquerque $ - 7 0000% $ - $ - 7 0000% $ - $ - $ - NMGRT - Out-of-State $ 200,000 5 1250% $ 10,250 $ 200,000 5 1250% $ 10,250 $ 400,000 $ 20,500

TOTAL PRICE $ 719,420 $ 719,420 $ 1,438,840

TOTAL PROPOSED

SAMPLE Table 1 - COST ELEMENT SUMMARY

OFY YYYY

(DD MMM YYYY – DD MMM YYYY)

OFY YYYY

(DD MMM YYYY – DD MMM YYYY)

NAME TASKS

CONTRACT

TYPE

QUOTED

PRICE

EVALUATED

PRICE DIFFERENCE

% of

WORK

TOTALS -$ -$ 0.00%

SAMPLE Table 2 - PRICE SUMMARY for SUBCONTRACTORS/IOTs & CONSULTANTS

OFY From To Purpose No.

Trips No.

Tvlrs No.

Days Per

Diem Lodging Rental

Car Airfare Total

YYY1

YYY1

YYY2

YYY2

SAMPLE Table 3 - Travel

TOTAL TRAVEL:

YYY1 Subtotal:

YYY2 Subtotal:

Revised: 2 Jun 2014 Page 8 of 8

Attachment 1