J-8_Contractor_Proposal_Guide.pdf

Contractor Proposal Guide

PSNS&IMF C/440

October 2014

Distribution Statement A: Approved for Public Release. Distribution is Unlimited i

Contents

Section 1 – Purpose

Section 2 – Proposal Requests

Section 3 – Contractor’s Proposal

3.0 General Instructions

3.1 Cost Elements

3.1.1 Direct Labor

3.1.2 Category/Trade Mix

3.1.3 Hours

3.1.4 Overtime and Shift Differential

3.1.5 Rates

3.1.6 Material

3.1.7 Subcontractor(s)

3.1.8 Other Direct Costs (ODCs)

3.1.9 Indirect Costs

3.1.10 Commercial Item Determination

3.1.11 Fee/Profit

3.2 Format for Submission of Line Item Summaries

3.3 Other Required Data (as applicable)

Section 4 - Proposal Adequacy Checklist ………………………………………. Addendum 1

Contractor Proposal Guide October 2014 2

Section 1 – Purpose

The Contractor Proposal Guide (CPG) provides guidance to Industry for the submission of adequate proposals in accordance with the proposal request.

Section 2 – Proposal Requests

Proposal requests shall be initiated by a Contracting Officer or Contract Specialist.

Section 3 – Contractor’s Proposal

Contractor proposals shall contain, at a minimum, the information necessary for the Contracting

Officer to fully understand all costs contained within the proposal including a basis of estimate as defined by the proposal request. The following information, as applicable shall be contained within each proposal.

3.0 General Instructions

3.0.1 First Page

The first page of the contractor’s proposal must contain the following:

1) Solicitation, contract, and/or modification number

2) Contractor name and address

3) Point of Contract (POC) information

4) Name of administrative contracting office

5) Type of contract action (new contract, change order, request for contract change, etc.)

6) Proposed cost; profit/fee; and total cost (by year if applicable - FY or calendar)

7) Indication of Contractor need of Government Furnished Property

8) Contractor subject to CAS and applicable disclosure statements

9) Certified Cost and Pricing Statement

10) Date of Submission

11) Name, title, and signature of contractor authorized representative

3.0.2 Specific Information Required

1) Certified Cost & Pricing Data, if applicable

2) Certified Cost & Pricing Certification, if applicable, or identify applicable exceptions

3) Explanation of estimating process. For example; judgmental factors used, methods used, nature and amount of contingencies included

4) Relationship between contract line item prices and the total contract price, which must be consistent with contractor’s cost accounting system

5) If multiple contract line items are proposed, provide summary of total amounts inclusive of all line items for each element of cost

6) Incurred Costs, if applicable

Contractor Proposal Guide October 2014 3

7) Identify applicable Forward Pricing Rate Agreements (FPRA)

3.1 Cost Elements

3.1.1 Direct Labor

The contractor’s proposal shall provide labor hours and labor costs.

3.1.2 Category/Trade Mix

The contractor’s proposal shall provide detailed category/trade mix labor hour breakdowns at the paragraph and subparagraph level of the work specification and/or statement of work (SOW).

3.1.3 Hours

The contractor’s proposal shall include the number of labor hours proposed as part of 3.1.

3.1.4 Overtime and Shift Work Differential

3.1.4.1 The contractor’s proposal shall meet the overtime justification requirements as outlined below:

Overtime justification shall be supported with rationale based on the following considerations:

1) Historical use of overtime hours for the work item in previous availabilities;

2) Time allotted to accomplish the specific task utilizing OT;

3) Amount and nature of work to be accomplished;

4) Number of hours for each trade to accomplish the work;

5) Manpower resources available to the contractor to include the number of personnel required by trade;

6) Point in time on the critical path of the specific tasking that the work needs to be accomplished;

7) Detailed schedule which outlines the hours per day and days per week that work will be performed using overtime for each work item by trade

8) Other pertinent facts pertaining to the proposed need for overtime,

3.1.4.2 The contractor’s proposal, when submitted, shall contain all the supporting data and assumptions that were used in deriving the per item overtime hour allotments. No overtime will be proposed or negotiated as a percentage of the overall hours.

3.1.5 Rates

3.1.5.1 Unburdened

If the Contractor proposing has an established Forward Price Rate Agreement (FPRA) with the

United States Government, propose in accordance with the FPRA.

Contractor Proposal Guide October 2014 4

If the Contractor proposing does not have an established FPRA, the proposal must provide sufficient detail to identify the hourly direct cost of each labor category. This means providing an hourly rate by labor category. However, if the Contractor proposing utilizes a composite rate to estimate their labor effort, it is required to include the methodology for developing the composite.

Proposals containing overtime and/or shift differential overtime hours, should also contain clearly proposed overtime and/or shift differential hourly costs of each labor category or composite rate. The methodology for developing the overtime and/or shift differential hourly costs should be included in the proposal. For example, overtime hourly rate consists of the straight time rate multiplied by 1.5 for work in excess of 40 hours per work week.

3.1.5.2 Burdened

If the contractor proposes hourly labor rates fully or partially burdened, which means in addition to containing direct payroll costs, your proposed hourly rate contains fringe benefits, manufacturing overhead, and/or general and administrative costs, then the proposal should contain sufficient information for the Contracting Officer to analyze each cost element contained in the burdened hour. At a minimum, this would require the methodology used to burden the hourly rate, as well as the information used to develop the proposed indirect costs or and/or fee/profit contained in the rate.

3.1.6 Materials

The contractor’s proposal shall provide material costs estimates at the paragraph and subparagraph level. For items over $3,000, the proposal should provide sufficient support to indicate that adequate price analysis has been conducted and that the proposed price is in the best interest of the Government, for example, provide a minimum of 3 quotes. For items below this threshold, the contractor should be prepared to provide support upon request from the

Contracting Officer.

In addition, the contractor shall provide a consolidated bill of materials (BOM) that addresses all material requirements for the proposal. The bill of materials should encompass all proposed material, regardless of dollar value.

3.1.6.1 Bill of Material (BOM)

At a minimum, the proposed BOM should address:

1) Part Number

2) Item Name/Source Information

3) Work Item/Paragraph/Subparagraph reference

4) Unit Type (each, lot, package, ton, etc.)

5) Quantity

6) Unit Price

7) Total Price

Contractor Proposal Guide October 2014 5

3.1.6.2 Consumables

If the contractor has an established Forward Price Rate Agreement (FPRA) with the

Government, propose in accordance with the FPRA.

If the contractor does not have an established FPRA, the proposal must include an itemized description of what is contained in your consumable account. In addition, your proposal must include the mathematical computation or methodology of how the consumable rate was derived.

The proposal must describe how the estimated the total consumable cost was determined and identify the allocation base that this cost is associated with for a given year.

3.1.7 Sub-Contract Pricing

The firm awarding a subcontract is responsible for conducting appropriate cost or price analyses of proposed subcontract prices in demonstrating the subcontract price is fair and reasonable for each award no matter the dollar threshold. The results of the analyses and associated subcontract pricing, for the awardee, shall be included with all proposal submittals. All subcontractor proposals shall contain a cost breakdown containing at a minimum the same items required of the contractor proposals listed in sections 3.1.0 to 3.16 above, including but not limited to a breakdown of all hours by labor mix, associated hourly rate(s), overtime hours, bill of material, and second-tier subcontractor pricing depicting labor hours and price, material pricing, and any third-tier or subsequent subcontract pricing.

3.1.7.1 Competitive Subcontract Procurement - Competition

A price analysis memorandum shall be provided for all competitive subcontract procurements.

The price analysis memorandum shall list the vendors solicited, provide for a cost element comparison between the competitive bids received, evaluation criteria, and contain a narrative of the analysis, including how the evaluation criteria was utilized, and award determination.

3.1.7.2 Competitive Subcontract Procurement – One Bid Received

A price analysis memorandum shall be provided to document the price reasonableness determination of the one bid received under competitive conditions. Comparison of proposed prices to independent prime contractor should cost estimates, comparison of proposed prices to historical prices previously paid for similar work, results of negotiations, or any of the various price analysis techniques referenced at FAR 15.404-1(b) may be utilized to establish price reasonableness.

3.1.7.3 Single Source Subcontract Procurement

A price analysis memorandum shall be provided to document the price reasonableness determination of the single source subcontract action. Additionally, the price analysis memorandum shall detail the rationale and determination for award on a noncompetitive basis.

Comparison of proposed prices to independent prime contractor should cost estimates, comparison of proposed prices to historical prices previously paid for similar work, results of

Contractor Proposal Guide October 2014 6 negotiations, or any of the various price analysis techniques referenced at FAR 15.404-1(b) may be utilized to establish price reasonableness.

3.1.8 Other Direct Costs

The contractor’s proposal shall identify all Other Direct Costs (ODC). Examples of costs that are commonly proposed as other direct include, but are not limited to:

Travel

Rental of equipment

Fuel

Transportation

Preservation, packaging, and packing costs

Supporting documentation (objective quality evidence) must be provided for all ODCs, and may include but is not limited to; invoices, travel vouchers, vendor quotes, published rate sheets, and rental contracts.

3.1.9 Indirect Costs

If the contractor has an established FPRA with the United States Government, propose in accordance with the FPRA and provide the application methodology for the indirect rates.

If the contractor does not have an established FPRA, the proposal should provide sufficient information to support the proposed indirect rates. For each indirect rate category in the proposal, the proposal should provide the estimated pool costs to be allocated for the year, the estimated allocation basis of the pooled costs, and a description of the types of costs within the indirect category. The contractor’s proposal shall identify all applicable indirect costs, the indirect cost nomenclature, and the application methodology as a basis of cost. Examples of indirect costs include, but are not limited to:

3.1.10 Commercial Item Determination

The contractor’s proposal must identify, at the prime and subcontractor level, any commercial items proposed subject to exemption of certified cost and pricing data, if applicable. The contractor’s proposal must specifically identify the commercial item claim.

3.1.11 Fee/Profit

Fee or profit should be proposed as a discrete, separately identifiable amount , and in accordance with the terms and conditions of the contract or proposal request. Fee or profit should not be consolidated with any other cost category such as general and administrative costs, overhead, or other direct costs.

Fee or profit should not be assessed on any cost element that already contains a burdened fee or profit. Cost elements that already contain a burdened fee or profit should be clearly identified and your proposal should clearly demonstrate that additional fee or profit

Contractor Proposal Guide October 2014 7 proposed for other cost elements are not applied to burdened cost elements (for example:

burdened labor rates).

The proposal should include the methodology for applying proposed fee or profit. For example, indicate if your proposal assesses fee/profit on total costs or if your proposal only assesses fee/profit on labor costs.

3.2 Format for Submission of Line Item Summaries

The contractor’s proposal shall contain all cost element breakdowns per FAR 15.408 Table 15-2

III as appropriate.

3.3 Other Required Data (as applicable)

The Contracting Officer may request any other data reasonably necessary in order to make a fair and reasonable determination. Furthermore the contractor is responsible to provide additional contract specific relevant data.

Contractor Proposal Guide October 2014 8

Section 4 – Proposal Adequacy Checklist

When the solicitation requires the submission of certified cost or pricing data, the offeror shall complete 252.215-7009, Proposal Adequacy Checklist, to facilitate submission of a thorough, accurate, and complete proposal. The Proposal Adequacy

Checklist should include providing location of requested information, or an explanation of why the requested information is not provided (may use continuation pages).

In preparation of the offeror’s checklist, offerors may elect to have their prospective subcontractors use the same or similar checklist as appropriate. The checklist is to be submitted with the contractor’s proposal.

http://www.acq.osd.mil/dpap/dars/dfars/html/current/252215.htm#252.215-7009

Contractor Proposal Guide October 2014 9

Proposal Adequacy Checklist ………………………………………. Addendum 1

References Submission Item Guide

Item No.

Proposal

Page No.

If not provided, EXPLAIN (may use continuation pages

GENERAL INSTRUCTIONS

1. Para A(1) FAR 15.408, Table 15-2, Section I

Is there a properly completed first page of the proposal per FAR 15.408 Table

15-2 I.A or as specified in the solicitation?

3.0.1

2. Para A(7) FAR 15.408, Table 15-2, Section I

Does the proposal identify the need for

Government-furnished material/tooling/test equipment? Does the contractor include the lending contract number and the Contracting

Officer contact information (if known)

3.0.1

3. Para A(8) FAR 15.408, Table 15-2, Section I

Does the proposal include identification of any CAS non-compliances or other estimating deficiencies that may impact the proposed price?

3.0.1

4. Para A(8) FAR 15.408, Table 15-2, Section I

Does the proposal disclose any other known activity that could materially impact the costs; such as, existing excess material, changes in production methods, make-or-buy decisions, company re-organizations, new business, or new technology?

3.0.1

5. Para B FAR 15.408, Table 15-2, Section I

Is an index of all certified cost or pricing data and information accompanying or identified in the proposal provided and appropriately referenced?

3.0.2

6. FAR 15.403-1(b)

Are there any exceptions to submission of certified cost or pricing data pursuant to FAR 15.403-1(b)? If so, is supporting documentation included in the proposal?

3.0.2

Contractor Proposal Guide October 2014 10

7. Para C(2)(ii) FAR

15.408, Table 15-2, Section I

Does the proposal disclose the judgmental factors applied and the mathematical or other methods used in the estimate, including those used in projecting from known data?

3.0.2

8. Para C(2)(ii) FAR

15.408, Table 15-2, Section I

Does the proposal disclose the nature and amount of any contingencies included in the proposed price?

3.0.2

9. Para D FAR 15.408, Table 15-2, Section I

Does the proposal explain the basis of all cost estimating relationships (CERs)

(labor hours or material) proposed on other than a discrete basis?

3.0.2

10. Paragraphs D and E

FAR 15.408, Table 15-2, Section I

Is there a summary of total cost by element of cost and are the elements of cost cross-referenced to the supporting cost or pricing data? (Breakdowns for each cost element must be consistent with the contractor’s cost accounting system).

3.0.2

11. Para D FAR 15.408, Table 15-2, Section I

Is total price by cost element provided by year (if applicable)? Contractor should identify if by Calendar Year

(CY) or Government Fiscal Year (GFY) or both as required.

3.0.2

12. Paragraphs D and E

FAR 15.408, Table 15-2, Section I

If more than one Contract Line Item

Number (CLIN) or sub Contract Line

Item Number (subCLIN) is proposed as required by the RFP, are there summary total amounts covering all line items for each element of cost and is it cross-referenced to the supporting cost or pricing data?

3.0.2

13. Para E FAR 15.408, Table 15-2, Section I

Are CLIN prices by cost element provided by year (if applicable)?

Contractor should identify if by CY or

GFY or both, as required.

3.0.2

Contractor Proposal Guide October 2014 11

14. Para E FAR 15.408, Table 15-2, Section I

Are recurring and non-recurring costs segregated at both the CLIN/subCLIN and total cost levels?

3.0.2

15. Para F FAR 15.408, Table 15-2, Section I

Does the proposal identify any incurred costs for work performed before the submission of the proposal?

3.0.2

16. Para G FAR 15.408, Table 15-2, Section I

Is there a Government forward pricing rate agreement (FPRA)? If so, ensure the contract proposal identified and included it.

3.0.2

COST ELEMENTS

MATERIALS AND SERVICES

17. Para A FAR 15.408, Table 15-2, Section II

Does the proposal include a description of the supplies or services and the basis on which the supply or service meets the Government’s requirements?

18. Para A FAR 15.408, Table 15-2, Section II

Does the proposal include a consolidated summary of individual material and services to include the basis for pricing? The offeror’s consolidated summary shall include raw materials, parts, components, assemblies, subcontracts and services to be produced or performed by others, identifying as a minimum the item, quantity, and price.

3.1.6

SUBCONTRACTS (Purchased materials or services)

19.

Does the proposal identify those actions for which assist audits have been requested by the contractor or a subcontractor and identify the request data and scheduled receipt date?

3.1.7

20. FAR 15.404-3(c)

Per the thresholds of FAR 15.404-3(c), Subcontract Pricing Considerations, does the proposal include a copy of the applicable subcontractor’s proposal(s)?

3.1.7

21. Para A FAR 15.408, Table 15-2, Section II

Is the subcontractor Price/Cost Analysis establishing the reasonableness of each proposed subcontract included with the proposal?

3.1.7.1

Contractor Proposal Guide October 2014 12

22.

If the offeror’s Price/Cost Analyses are not provided with the proposal, does the proposal include a matrix identifying dates for receipt of subcontractor proposal, completion of fact finding for purposes of Price/Cost Analysis, and submission of the Price/Cost Analysis?

3.1.7

COMMERCIAL ITEM DETERMINATIONS

23. FAR 2.101; FAR

15.403-1(b)(3) or (b)(5)

Are commercial items being proposed either at the prime or subcontractor level that would be exempt from certified cost or pricing data requirements?

3.1.10

24. FAR 2.101

Has the contractor specifically identified the type of commercial item claim (FAR

2.101 commercial item definition paragraphs (1) through (8)), and the basis on which the item meets the definition?

3.1.10

25. FAR 2.101; FAR

15.403-1

For modified commercial items (FAR

2.101 commercial item definition paragraph (3)); did the contractor classify the modification(s) as either –

3.1.10

A modification of a type customarily available in the commercial marketplace (para. 3(i)); or 3.1.10

A minor modification

(para. 3(ii)) of a type not customarily available in the commercial marketplace made to meet Federal Government requirements not exceeding the thresholds in FAR 15.403-1(c)(iii)(B)?

(see note below)

3.1.10

26. FAR 2.101

For proposed commercial items “of a type,” or “evolved” or modified (FAR

2.101 commercial item definition paragraphs (1) through (3)), did the contractor provide a technical description of the differences between the proposed item and the comparison item(s)?

3.1.10

27. FAR 15.402(a)(2);

FAR 15.403-1(c)(3)(ii);

FAR 15.403-3(c); FAR

15.404-3(b); FAR 15.404-

3(c); FAR 15.406-2

Does the proposal include a determination of price reasonableness for all commercial items offered?

3.1.10

Contractor Proposal Guide October 2014 13

ADEQUATE PRICE COMPETITION

28. Para A FAR 15.408, Table 15-2, Section II

Does the proposal support the degree of competition and the basis for establishing the source and reasonableness of price for each subcontract or purchase order priced on a competitive basis exceeding the threshold for certified cost or pricing data?

3.1.7.1

INTER-ORGANIZATIONAL TRANSFERS

29. Para A(2) FAR

15.408, Table 15-2, Section II

For inter-organizational transfers proposed at cost, does the proposal include a complete cost proposal in compliance with Table 15-2?

3.0.2

30. FAR 31.205-26(e);

FAR 15.403-1

For inter-organizational transfers proposed at price in accordance with

FAR 31.205-26(e), does the proposal provide an analysis by the prime that supports the exception from certified cost or pricing data in accordance with

FAR 15.403-1?

3.0.2

DIRECT LABOR

31. Para B FAR 15.408, Table 15-2, Section II

Does the proposal include a time phased

(i.e. monthly, quarterly) breakdown of labor hours, rates and costs by category or skill level? If labor is the allocation base for indirect costs, the labor cost must be summarized in order that the applicable overhead rate can be applied.

3.1.1

32. Para B FAR 15.408, Table 15-2, Section II

For labor Basis of Estimates (BOEs), does the proposal include labor categories, labor hours, task descriptions, Statement of Work reference, applicable CLIN, Work

Breakdown Structure, rationale for estimate, applicable history, and time-phasing?

3.1

33. Paragraphs B and C

FAR 15.408, Table 15-2, Section II

Does the proposal include all rates and factors by year that are utilized in the development of the proposal and the basis of those rates and factors

(FPRA/FPRP)? The Offeror shall identify the official submittal of such rate and factor data.

3.1.5

Contractor Proposal Guide October 2014 14

34. FAR 22.10

If covered by the Service Contract

Labor Standards statute (41 U.S.C.

chapter 67), are the rates in the proposal in compliance with the minimum rates specified in the statute?

3.1

INDIRECT COSTS

35. Para C FAR 15.408, Table 15-2, Section II

Does the proposal indicate the basis of estimate for proposed indirect costs?

(Support for the indirect rates could consist of cost breakdowns, trends, and budgetary data.)

3.1.9

OTHER COSTS

36. Para D FAR 15.408, Table 15-2, Section II

Does the proposal include other direct costs and the basis for pricing? If travel is included, does the proposal include number of trips, number of people, number of days per trip, locations, and rates (e.g. airfare, per diem, hotel, car rental, etc.)?

3.1.8

37. Para E FAR 15.408, Table 15-2, Section II

If royalties exceed $1,500, does the proposal provide the formation/data identified by Table 15-2?

3.1.8

38. Para F FAR 15.408, Table 15-2, Section II

When facilities capital cost of money is proposed, does the proposal include submission of Form CASB-CMF or reference to an FPRP/FPRA and show the calculation of the proposed amount?

3.1.9.6

FORMATS FOR SUBMISSION OF LINE ITEM SUMMARIES

39. FAR 15.408, Table

15-2, Section III

Are all cost element breakdowns provided using the applicable format prescribed in FAR 15.408, Table 15-

2.III (or alternative format if specified in the RFP)?

3.2

40. Para B FAR 15.408, Table 15-2, Section III

If the proposal is for a modification or change order, have cost of work deleted

(credits) and cost of work added (debits) been provided in the format described in

FAR 15.408, Table 15-2.III.B?

3.2.2

41. Para C FAR 15.408, Table 15-2, Section III

For price revisions/redeterminations, does the proposal follow the format in

FAR 15.408, Table 15-2.III.C?

3.2.3

OTHER

Contractor Proposal Guide October 2014 15

42. FAR 16.4

If an incentive contract type, does the proposal include offeror proposed target cost, target profit or fee, share ratio, and, when applicable, minimum/maximum fee, ceiling price?

3.1.11

43. FAR 15.404-4(c)(4)(i) Is proposed fee in accordance with statutory guidance?

3.1.11

44. FAR 16.203-4(a)(1)

If Economic Price Adjustments are being proposed, does the proposal show the rationale and application for the proposed indices?

3.3.1

45. FAR 32.000

If the offeror is proposing Performance

Based Payment, have they provided an expenditure profile, proposed events, and their projected dates, proposed values for each event, completion criteria, and identification of which events are severable or cumulative?

3.3.2

46. FAR 15.408(n)

Excessive Pass-through Charges –

Identification of Subcontract Effort: If the offeror intends to subcontract more than 70% of the total cost of work to be performed, does the proposal identify:

(i) The amount of the offeror’s indirect costs and profit applicable to the work to be performed by the proposed subcontractor(s); and (ii) A description of the added value provided by the offeror as related to the work to be performed by the proposed subcontractor(s)?

3.3.3

47.

Does the proposal identify the location and point of contact for any certified cost or pricing data referenced in, but not provided with, the proposal?

3.0.1