Revised Relevancy and Cost Price Sections.docx

Revised Relevancy Definitions for Section M-5B:

B. For purposes of this evaluation, recency is defined as work completed or ongoing during the three (3) years prior to the issuance of this solicitation. Relevant means sufficiently similar to this acquisition with the same magnitude and complexity to provide indicators of expected performance. The relevancy of the work performed on past performance citations will be assessed for overall contract management, security, quality assurance and staffing; the Cost/Price factor and areas described in Section M-5B. However, all aspects of performance that relate to this acquisition may be considered. In determining relevancy for individual submissions, consideration will only be given to the effort, or portion of the effort, being proposed by the offeror or subcontractor, teammate and/or joint venture partner if they are identified to perform that effort for the Team Relevancy Matrix. The following relevancy criteria will be applied to each offeror (or subcontractor, teammate and/or joint venture partner, and key personnel if applicable):

OVERALL CONTRACT MANAGEMENT, SUBCONTRACTING, & COST

(1) a prime contract;

(2) multiple subcontractor/ team members similar to the offeror’s proposal for this effort;

(3) a single cost-type contract or TO with a value of at least $15 million per year

(1) multiple subcontractor/ team members;

(2) a single cost-type contract or TO with a value of at least $5 million per year

STAFFING

PLANNING, PROGRAMMING, BUDGETING AND EXECUTION (PPBE) AND PROGRAM OBJECTIVE MEMORANDUM (POM) ACTIVITIES

government budgetary decision support experience.

ACQUISITION PROCESS AND PROGRAM LIFE CYCLE

EXERCISES

ORGANIZE, TRAIN & EQUIP

NUCLEAR FORCE

GLOBAL POSITIONING SYSTEMS

RANGE CAPABILITIES

DATABASE MANAGEMENT

MODELING AND SIMULATION

NETCENTRIC

CYBER

Revised Cost/Price Sections:

L-9 VOLUME V – FACTOR 3 – COST/PRICE PROPOSAL

A. Cost/Price Reasonableness and Realism. These instructions provide the offeror guidance in submitting information other than cost or pricing data required to evaluate the reasonableness of their proposed cost/price. Note that unrealistically low or high proposed costs or prices, initially or subsequently, may be grounds for eliminating a proposal from competition either on the basis that the offeror does not understand the requirement or has made an unrealistic proposal. Offers should be sufficiently detailed to demonstrate their reasonableness , realism and affordability. The burden of proof for credibility of proposed costs/prices rests with the offeror.

B. Estimating Techniques and Methods. When responding to Cost/Price Volume requirements in the solicitation, the offeror and associated subcontractors may use any generally accepted estimating technique, including contemporary estimating methods [such as Cost-to-Cost and Cost-to-Non-Cost Estimating Relationships (CERs), commercially available parametric cost models, in-house developed parametric cost models, etc.] to develop their estimates. If necessary, reasonable and supportable allocation techniques may be used to spread hours and/or costs to lower levels of the work breakdown structure (WBS).

C. Cost/Price Information. Information beyond that required by this instruction shall not be submitted unless considered essential to document or support the cost/price position. All information relating to the proposed price including all required supporting documentation must be included in the section of the proposal designated as the Cost/Price volume. Do not include this information and documentation elsewhere in the proposal.

D. Other Than Cost or Pricing Data Requirements. IAW FAR 15.403-5(b)(1),(2), and (3), the offeror's format for submitting such information should be used unless the contracting officer decides that use of a specific format is essential and the format has been described in the solicitation.

In accordance with FAR 15.403-3, information other than cost or pricing data is required to support price (or cost, as applicable) reasonableness (and, if applicable, cost realism). Information shall be provided in accordance with FAR 15.403-5(except where tailored formats are specified hereunder--see paragraph 6.4.2 below). If, after receipt of proposals, the CO determines there is insufficient information available to determine price reasonableness and none of the exceptions in FAR 15.403-1 apply, the offeror shall be required to submit cost or pricing data.

E. Rounding. All dollar amounts provided shall be rounded to the nearest dollar. All labor rates and percentage factors shall be rounded to the nearest two decimal places.

F. Volume Organization. The Cost/Price volume shall consist of the following sections:

SECTION 1 Table of Contents; summary descriptions of estimating, purchasing, and accounting systems; changes to estimating, accounting practices, or Cost Accounting Standards (CAS) Disclosure Statement. Include copies of current Forward Pricing Rate Agreements (FPRA) or company Forward Pricing Rate Proposals currently under review by DCMA/DCAA.

SECTION 2 – For each priced cost-plus-fixed-fee task order, provide the other than cost or pricing information and supporting data (i.e. non-Certified data), to include detailed cost buildup schedules, estimating methodology, and narrative bases of estimates for the labor, subcontractor effort, and other direct costs. Each TO shall include a basic year and four option years. Do not include travel or other direct costs (ODCs) costs in your proposal. These amounts will be determined by the Government. However, any applicable indirect costs or burdens for travel and ODCs should be identified. No profit is allowed on travel, material or ODCs. Work under these task orders has an estimated budget as follows. This applies to the entire period of task order performance (basic and four option periods). Each offeror shall determine an approach to meet the PWS requirements. That approach may result in cost proposals below, at, or above the budgeted amounts:

MILSATCOM Task Order #1 - TBD MW/MD Task Order #2 - TBD

SECTION 3 – Prime Contractor’s Cost or Price Evaluations of Subcontractor and Interdivisional Transfer Prices per FAR 15.404-3. Describe the evaluation rationale that leads to the prime’s conclusion that the subcontract/interdivisional price is reasonable. Explain all adjustments made to the subcontractor’s proposed costs and prices.

SECTION 4 – Professional Employees Compensation Plan as prescribed in FAR 52.222-46. Offerors shall submit a total compensation plan for the offeror and team members/subcontractors setting forth salaries and fringe benefits proposed for professional employees who will work under the proposed contract.

SECTION 5 – Identification of Subcontract Effort - Excessive Pass-Through Charges IAW DFARS 252.215-7003. If the offeror intends to subcontract more than 70 percent of the total cost of the work, the offeror shall identify in its proposal the amount of the subcontractor’s indirect costs and profit applicable to the work to be performed by the subcontractor and a description of the added value provided by the subcontractor as related to the work to be performed by that subcontractor. The CO shall determine if excessive pass-through charges exist; the Government will not pay those charges.

SECTION 6 – Subcontract and Interdivisional Transfer proposals. Subcontracts and interdivisional transfers with total contract prices that are both more than the cost or pricing data threshold (currently $650,000) and more than 10 percent of the prime contractor’s proposed price are subject to the same information requirements as the prime contractor. In those instances, the subcontractor or interdivision shall submit the applicable cost breakdowns with supporting detail and estimating rationale. Subcontractors may submit their cost proposals directly to the CO if the information is considered proprietary data. All required data must be received by the same date and time as the prime’s proposal.

G. Contractor Systems Status.

1. Accounting System. Indicate whether your accounting system has been determined adequate, by DCMA or DCAA, for cost reimbursement type contracts. Provide evidence of such approval. In accordance with FAR 16.306 (c), no cost-plus-fixed-fee (CPFF) task order may be awarded unless the limitations in FAR 16.301-3 are met. This affects all team members and subcontractors if the prime anticipates awarding cost-reimbursement contracts to any of its subcontractors. If no cost-reimbursement subcontracts are to be awarded, the offeror shall so state. If cost-reimbursement subcontracts are to be awarded, the offeror shall provide necessary information from subcontractors.

2. Purchasing System. Indicate whether your purchasing system has been approved by DCMA, as prescribed in FAR 44.3, Contractors’ Purchasing Systems Reviews. Provide evidence of such approval.

H. Other Information.

(Significant tailoring may be required to be consistent with the level of cost information you request. Remember to ask for the minimum amount of cost information and don't ask for any information you don't plan to evaluate.)

1. Funding Profile. (NOTE: Tailor the following, based on whether you will need a funding profile and the level of segregation required. For example, for contracts involving activities properly funded by different appropriations, ensure the level of detail is sufficient to differentiate among the types of required funds and the timing of expected funding requirements. This information is normally used in incrementally funded contracts.)

Submit then-year funding requirements by type of funds and by government fiscal year, supported by monthly/quarterly projections of expenditures, commitments, and termination expense. Note that funding schedules must be consistent with any imposed government budgetary constraints.

2. Cost Summary by Cost Elements. Provide a cost summary by major cost elements for each task order using the format shown below:

(The following example format should be tailored to reflect the applicable elements and level of detail.)

TABLE L-9 - COST SUMMARY BY COST ELEMENTS

Prime Hours

Inter-divisional hours

Subcontractor hours

Total Hours

Prime Direct Labor ($)

Prime Overhead ($)

Prime Material ($)

Subcontracts ($)

Interdivisional ($)

Prime Other Direct Costs ($)

Subtotal ($)

Prime G&A ($)

Estimated Cost ($)

Facility Capital Cost of Money ($)

Prime Profit/Fee ($)

Total Price ($)

3. Basis of Estimate. Include narrative basis of estimate sheets supporting the proposed hours, material, and other direct costs for each task order.

(This is requested as a separate attachment so that it can be provided to the technical team for cost realism and technical evaluation purposes.)

6. Major Material Items. Submit a list and description of any major material items included in the proposed price.

7. Schedule of Rates. Submit a schedule with proposed direct and indirect rates by year. This schedule is to include (but separately identify) prime contractor, subcontractor, and inter-divisional transfer rates.

(Note: If subcontractor or inter-divisional rates are not available to the prime contractor, have the companies send them directly to the CO, referencing this solicitation number.

8. Submission of Cost Models. S(If an offeror generated cost/price model is desired, use language such as the following :)

ubmit an electronically encoded cost/price model in support of the proposed price. Any cost/price model submitted must be consistent with an approved estimating system and must duplicate the logic and mathematical formulas reflected in the paper copy of your proposal. Cost/price models submitted must comply with the format described in the solicitation paragraph L-2.C.6.h.

9. Management Reduction. If estimated costs to perform the proposed effort have been decreased due to a management decision, provide a summary and rationale for the proposed reduction.

M-6 VOLUME V – FACTOR 3 – COST/PRICE

A. Cost/Price Evaluation. See Section M Guide for further discussion of Cost/Price Evaluation.

The offeror’s cost/price proposal will be evaluated (For Firm-Fixed-Price (FFP) efforts) based on the total evaluated price as determined by the Government. A significant difference between the offeror’s proposed cost and the Government-determined cost will be considered an indicator that the offeror does not understand the requirement or will be reflected in the Government’s realism analysis.

B. For the purpose of determining best value, the Government will compare the results of the total evaluated price for each offeror. The total evaluated price shall consist of the sum of the two task orders including option years, plus consideration for any probable cost adjustments identified as a result of the Government’s cost realism analysis. Evaluation of options shall not obligate the Government to exercise such options. (NOTE: There could be situations that affect the bottom line evaluated price. These should be addressed as appropriate for your effort. An example is rental value for Government Furnished Property.)

C. Reasonableness. Techniques and procedures described under FAR 15.404-1(b), Price Analysis, will be the primary means of assessing proposal reasonableness. The evaluation techniques described under FAR 15.404-1(c) through (g), as determined appropriate, may also be performed in further determining the reasonableness of the proposal. For a price to be reasonable, it must represent a price to the Government that a prudent person would pay in the conduct of competitive business. Normally, price reasonableness is established through cost and price analysis techniques as described in FAR 15.404, Proposal Analysis. For additional information see FAR 31.201-3, Determining Reasonableness.

D. Cost Realism Analysis: Cost realism analyses will be performed in accordance with FAR 15.404-1(d). A Government calculated cost adjustment, resulting from its probable cost analysis, may be added into the total evaluated price. The Government evaluation of proposal realism will be the extent to which proposed costs indicate a clear understanding of requirements, and the proposal reflects a sound approach to satisfy those requirements consistent with the approach described in the offeror’s Mission Capability proposal.

E. Affordability: The affordability assessment will consider the total estimated contract price as compared to the projected budget for this program.

F. The offeror’s proposals will be reviewed for compliance with the data submission requirements specified in Section L of the RFP. The assessment will consider the traceability of the pricing information provided to task order prices. Proposals that do not include the required information or do not comply with the preparation instructions may be rejected.

G. Contractor Responsibility (Financial Capability, Accounting System, Purchasing System). The information obtained in the Government’s Pre-Award Survey analyses will be used by the Contracting Officer to determine that prospective Contractors meet the applicable responsibility standards in FAR 9.104, Standards.