Cost_Narrative.pdf

ATTACHMENT XX, COST NARRATIVE

The cost narrative(s) should address the following, as applicable:

1. Identification of the Defense Contract Audit Agency office and point of contact if known (include name, address, phone number, and e-mail address) having cognizance over the offeror’s proposal.

2. Whether your organization is subject to cost accounting standards; whether your organization has submitted a CASB Disclosure Statement, and if it has been determined adequate; whether you have been notified that you are or may be in noncompliance with your Disclosure Statement or CAS (other than a noncompliance that the cognizant Federal agency official has determined to have an immaterial cost impact), and, if yes, an explanation; whether any aspect of this proposal is inconsistent with your disclosed practices or applicable CAS, and, if so, an explanation; and whether the proposal is consistent with your established estimating and accounting principles and procedures and FAR Part 31, Cost Principles, and, if not, an explanation.

3. Identify all proposal assumptions and rationale. Assumptions that alter or supplant terms or conditions contained in this solicitation, as amended, may result in the Offeror’s proposal being rejected and the Offeror being removed from consideration.

4. Labor: Discuss the following using text and figures:

a. Development of productive hours for personnel. Account for and explain the difference between available and productive hours. Include a discussion on the standard work week proposed. If different productive hours are proposed for different PWS paragraphs or types/categories of personnel, each should be discussed. This discussion should separately discuss Transition and FOC hours.

b. Basis for labor rates.

c. Identification of all proposed compensation beyond basic pay, such as uplifts (whether based on offeror policy or Department of State uplifts), overtime premiums, pay differentials (e.g., swing, evening), bonuses, etc., the basis for them, and how they are calculated. The discussion should identify when, and under what circumstances, each type of compensation is applicable (e.g., overtime is applied to all hours exceeding X hours per week). The discussion should separately address the applicability of such compensation to productive and non-productive hours. If no additional compensation is proposed, indicate as such.

d. Rest and relaxation (R&R) policy: Discuss the offeror’s R&R policy. The offeror should discuss the following:

(1) Number of R&R trips proposed each year per employee.

(2) Total number of days away from theater per trip, including separate identification of paid and unpaid days per trip, and the number of paid hours.

(3) Identification of any allowances proposed per trip, such as airfare tickets, and the amount of such allowances.

e. Retention bonuses or payments, if any.

5. Defense Base Act (DBA) Insurance: Address whether DBA insurance costs for subcontractor personnel is included in the subcontract cost, or as part of the offeror’s own cost.

6. Due to the complexity of many formulas (particularly those containing numerous conditional statements), explain how uplift and indirect rates (including direct labor overhead, fringes, G&A, etc.) are calculated. This explanation should refer to specific column headers used in the offeror’s detailed supporting schedules. For example, an explanation that states a rate is applied to “payroll” is not clear if there is no column or name in the “Labor Details” supporting schedule labeled “Payroll”.

In this case, the offeror should identify what columns constitute “payroll”.

7. If a factor is being applied to any cost and the factor reduces the cost, the factor should be explained. Failure to do so may result in an upward adjustment to the offeror’s proposed costs. The offeror should provide support showing the realism of the factor.

8. Address any escalation proposed.

9. Non-fee bearing costs: Include the due diligence statement required elsewhere in this solicitation, and identify the types of costs for which fee has not been applied.

10. A statement addressing the offeror’s obligations under FAR Clause 52.215-22 – Limitation on Pass-Through Charges – Identification of Subcontract Effort. Any cost information required under FAR 52.215-22 should be submitted in Excel with working formulas.

11. Compliance with Host Nation Laws, Including Labor Laws: Provide an affirmative statement that the offeror understands and will fully comply with current host nation laws, including labor laws, throughout contract performance, and that all costs proposed are consistent with current host nation laws. Provide the basis for the offeror’s statement (e.g., consulted with licensed host nation attorney, in-country experience with no compliance issues, etc.).

12. Any other items necessary to explain the offeror’s proposal.