Attach 8_SectionLPricingInstructions.pdf

L-001 COST PROPOSAL AND ADEQUACY STRUCTURE

(a) In response to this Request for Proposals (RFP), 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 (1) utilize the DFARS provision 252.215- 7009, Proposal Adequacy Checklist (PAC), in pre-submission proposal quality reviews, and

(2) 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 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 RFP, but in any case prior to proposal submittal, to resolve the questions.

(3) Non-compliances with the DFARS PAC and the additional requirements of this provision will require immediate correction. If non-compliances occur, a revised and adequate proposal must be received within fifteen (15) calendar days. 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 shall flow down this provision to subcontractors/affiliates required to submit certified cost or pricing data in support of this RFP.

(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.

(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 exceptions to certified cost or pricing data found at FAR 15.403-1(b) and DFARS 212.102(a)(i)(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 RFP.

(1) Breakout by Year. If the proposal includes more than one CLIN, the proposal shall include a breakout of CLIN prices by cost element by Contractor Fiscal Year (CFY). At the contracting officer’s direction, the breakout by year shall also be provided by:

_X_ Contract Period

___ Calendar Year

The proposal shall define the timeframe of the Contractor Fiscal Year (for example, January - December).

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

(3) When the proposal includes material costs, the proposal shall include a consolidated bill of materials (CBOM) at the total contract level in an electronic, sortable format (Excel spreadsheet or other format approved by the contracting officer).

i. When the amounts proposed in the CBOM include application of escalation, the proposal shall identify the base value, the escalation rate(s) used, and the escalation amount associated with each item escalated.

ii. When the proposed amount is based on historical data which has been adjusted (for example, for differences in quantity), the CBOM shall clearly identify the adjustments made to the historical data and the reason for each adjustment.

(4) All costs proposed on the basis of Cost Estimating Relationships (CER) 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. The contractor shall identify all CERs that have been audited and/or reviewed by DCAA and/or DCMA. For CERs not audited or reviewed by DCAA or DCMA, the contractor shall include a basis of estimate (BOE) for each CER to include historical actuals used as the basis.

(5) For any costs incurred prior to proposal submission, the proposal shall identify actual hours and cost incurred as well as hours/costs to complete and the time phasing associated with these hours/costs. This information/data shall be provided in a time-phased cost element summary format.

(6) Submission of Historical Actual Costs Incurred.

(i) The contractor shall provide the following information for prior acquisition: FA8540-19-D-0001

For this contract, the contractor shall provide the following information in Microsoft Excel for the calendar years 2019 - 2023:

a. contract number (including modification number if applicable) or other identifier;

b. contract type;

c. contract quantity;

d. contract price; and

e. actual cost incurred, including a breakout of actuals by hours and by cost as recurring/non-recurring costs and by cost element. If performance is not complete on any of the specified contract actions, provide an estimate to complete and the basis for that estimate.

(ii) The contractor shall also require that its top five major sole source subcontractors provide the information listed in the above paragraphs (i) a. through

e. on prior contracts for items the prime is purchasing from the subcontractors for this effort. If a subcontractor’s information on prior actuals is not included in the prime’s proposal, the proposal should identify status and anticipated receipt date(s).

If the subcontractor deems the information proprietary, the subcontractor may submit the information directly to the contracting officer.

(7) 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.

(8) If the offeror intends to request Performance-Based Payments (PBP), the offeror’s proposal shall include a monthly expenditure profile, proposed events and their projected completion dates, rationale on why the proposed event demonstrates significant progress towards the completion of the end item, proposed values for each event, completion criteria for each event, and an identification of each event as severable or cumulative.

(9) Commercial product and commercial service considerations:

i. The offeror’s proposal shall provide support for any subcontractor commercial product or commercial service determinations, addressing, at a minimum, the following:

a. A description of the supplies or services;

b. Specific identification of the type of commercial product or commercial service claim (FAR 2.101 commercial product sub-definitions (1) through

(6) or commercial service sub-definitions (1) through (3)), and the basis on which the product or service meets the definition; and

c. For modified commercial products (commercial product sub-definition (3)), classification of the modification(s) with supporting rationale as either:

1. Of a type customarily available in the commercial marketplace (FAR 2.101 commercial item sub-definition (3)(i)); or

2. A minor modification of a type not customarily available in the commercial marketplace made to meet Federal Government requirements (FAR 2.101 commercial item sub-definition (3)(ii)).

Note that per FAR 15.403-1(c)(3)(iii)(B), modifications that meet the definition of minor modifications of a type not customarily available in the commercial marketplace as defined in FAR 2.101, paragraph (3)(ii) of the commercial product definition, will require the submission of certified cost and pricing data when the total price of all such modifications exceeds the greater of the threshold for certified cost or pricing data (FAR 15.403-4) or 5% of the total price of the contract at the time of contract award. All commerciality support shall be presented unredacted to the Government to include invoices and other supporting documentation.

ii. For proposed subcontract commercial products or commercial services “of a type”, or “evolved” or modified (FAR 2.101 commercial product sub-definitions

(1) through (3) or commercial service sub-definition (2)), the offeror shall provide a technical description of the differences between the proposed product or service and the comparison product or service and thoroughly address the cost differences between the proposed product or service and the comparison product or service.

iii. The proposal shall include, or the offeror shall make available, data other than certified cost or pricing data to establish price reasonableness of the proposed subcontract commercial product or commercial service (to include any modifications not subject to the requirement to submit certified cost or pricing data) by supplying:

a. Information/data related to competition, if competition is the offeror’s basis for asserting the reasonableness of the proposed subcontract price.

b. Information/data related to prices (sales data, market price assessments, etc.). Note that subcontractors may submit sales data directly to the contracting officer if the subcontractor deems the data proprietary.

c. The prime contractor’s or higher tier subcontractor’s price analysis/price reasonableness determination for the commercial subcontract in accordance with FAR 15.404-3(b)(1) and (2).

d. Cost information/data (cost element breakdown and supporting documentation not subject to certification in accordance with FAR 15.406- 2). Instances where cost information may be required include but are not limited to commercial products offered but never actually sold to the public, “of a type” commercial products or commercial services, or when sales data is limited and/or not recent and/or not for the same/similar quantities.

Note that the preferred method of establishing the price reasonableness of commercial products and commercial services is to obtain commercial sales data. It is recognized that other methods, such as market price assessment data or evaluation of cost data not subject to certification, are also acceptable when prior sales data cannot be obtained. Sales data shall (1) demonstrate sales to the general public; (2) be current; and (3) where possible, be in like quantities.

Products sold to state, local, or foreign governments or products sold with applications only to state, local, or foreign government or US Government end items are not considered to be sales to the general public unless the proposed commercial product meets the FAR 2.101 commercial product definition sub-definition (6). Furthermore, if any proposed commercial products and/or services is deemed other than commercial by the Government, the prime and/or subcontractors shall provide certified cost or pricing data and submit a full cost proposal compliant with Table 15-2 of FAR 15.408.

(10) Additional Cost/Price Proposal Requirements: All Bill of Materials (BOM) provided with the prime’s proposal must be in a live Excel file, and the BOM must provide traceability to the CLIN level and WBS level.

The contractor shall include all supporting data for the Basis of Estimate (BOE) on the BOE or as an attachment to the BOE. Basis of Estimates (BOEs) shall use actual and recent data, as close as possible to actual proposal submission date. Estimating rationale such as “per management direction”, “engineering judgment”, or any other debatable substantiation should be avoided whenever possible. In addition, the following areas are specifically highlighted:

i. A complete and thorough technical and cost/price analysis of each subcontractor/vendor to be awarded non-competitively and proposed in excess of $2,000,000 must be provided at the time of proposal submittal. If cost/price analysis of each subcontractor is not available at the time of proposal submittal, the contractor shall provide a schedule of when each subcontractor analysis will be submitted. Negotiations will not start until these analyses are provided. It should be noted that a dual award to two sources does not constitute competition.

ii. If any subcontractor amount exceeds $15M, or 10% of the overall price and in excess of $2,000,000, a copy of the subcontractor’s un-redacted proposal containing cost or pricing data is due concurrent with the submission of the proposal but no later than 5 days after receipt of the subcontract proposal by the Prime Contractor. Additionally, any subcontract terms or conditions are also to be submitted with the proposal. If the subcontractor refuses to submit an un-redacted proposal to the prime due to proprietary data, the prime shall notify the government prior to proposal submittal. The prime shall provide a POC to the subcontractor so that the government can obtain this information.

Additionally, the prime shall facilitate introductions and data responses/exchanges between the Government and subcontractors.

(e) Submission of electronic cost model: The proposal submission shall include a live Excel cost model with active formulas demonstrating the mathematical calculation of the prime contractor’s proposed costs to include all rate data and allocation for build-up of cost. In the event of a major subcontractor (i.e. a supplier whose proposed price exceeds $2M), a live Excel cost model meeting the requirements outlined in this paragraph must also be submitted for every major subcontractor. The electronic cost model shall include a cost build-up by Program Year and by Calendar Year by cost element, by BOE, and by CLIN/subCLIN, consistent with the yearly breakout required by paragraph (d)(1) of this provision. The electronic cost model shall link each Work Breakdown Structure (WBS) to the applicable CLINs with a total summary by cost element for each program year and a total summary for all years 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. The Government requires that the information provided be provided to all subcontractors and interdivisional transfers.