Exhibit E
UNIT COST EXAMPLE
FROM DOA LOUISIANA TANF WORKBOOK – GRANT WRITING GUIDE
What is a unit-cost approach? A unit-cost approach means that you will take your total proposal budget and divide that
number by your total number of planned service units (for the whole contract period) to arrive at a total cost per unit of
service delivered.
CALCULATING UNIT COST FOR YOUR PROGRAM
Your Total Proposal Budget
DIVIDED BY
Your Total Number of Planned Service Units
EQUALS
Your Total Cost Per Unit of Service
What are your service units? Service units can be any type of service volume that can be measured. Here are two
common examples – # of client contact hours per month, # of clients enrolled/participating per month (participation would
have to be defined and documented).
If you are planning to develop a proposal budget using the unit-cost approach, contact the appropriate State agency to
gain a better understanding of what would be an appropriate unit-cost that you could use in your proposal. Here is an
example of a unit-cost calculation for an After-school program:
UNIT COST EXAMPLE
LET’S ASSUME
Your Total Program Budget equals ……….................. $50,000
Your Total Program Capacity is .................................. 50 students
Your Program Calendar plans for ............................... 200 contact hours per student
HERE IS HOW YOU COULD CALCULATE A
UNIT COST FOR THIS PROGRAM
50 students X 200 contact hours = 10,000 total contact hours
$50,000 total budget divided by 10,000 total contact hours
EQUALS
$5.00 per contact hour
Using this example, you will only bill the contracting agency for the actual number of contact hours you deliver in the
billing period at a price of $5.00 per contact hour.
BILLING PERIOD CALCULATION
Total contact hours actually delivered during this billing period ….1,200
Your established unit-cost...............................................................$5.00 per contact hour
1,200 total contact hours in billing period X $5.00 unit-cost
EQUALS
$6,000 total bill for this billing period
Remember, a unit-cost contract requires that you invoice the State only for the service units actually delivered. When this
unit-cost method is used, invoices for reimbursement of line items in your budget will not be accepted – all reimbursement
to you under the contract will come through the unit-cost amounts.
Finally, the total of all the invoices (combined) you send to the contracting agency cannot exceed your contract (maximum
amount) total. In other words, if you have a unit-cost contract for a total of $50,000 you cannot submit invoices that total
more than $50,000 regardless of how many actual service units you deliver.
Note: The unit of service used in the Louisiana example is an hour of service contact. This is not a unit of service in
Denver's TANF RFP. Denver's TANF RFP has four specific units of service for Vocational Education Training:
Cost per each training enrollment; Cost per each successful training completion; Cost per each placement in unsubsidized
employment (optional); Cost per each successful six month job retention (optional).
The unit cost may be different for each unit of service.
Contractors will have the option of providing job placement and retention services to TANF participants upon successful
training completion or referring the TANF participant back to OED-WD for job placement and retention.