Introductions
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Mike Dement
Multi Management Services
757 725-0506
mike@multimanagementservices.com
www.multimanagementservices.com
BIO
– Worked with over 400 Businesses in the
Government Gov’t Sector
– Written over 200 Teaming Agreements
– Closed business in over 25 federal agencies
– Write over 200 proposals per year
Methods of Contract Pricing
• Firm Fixed Price (FFP)
• Time & Materials/Labor Hrs.' (T&M/LH)
• Cost-Plus-Fixed-F(CPFF, CPIF, CPAF)
• Performance-based contracts
Fixed Price
• Deliverable required.
• Not Required to track actual incurred
costs.
• Bill Client based on Milestones
met/Deliverables accepted.
Flexible Price
• Deliverable not required
• Required to track actual incurred costs
• Bill client based on hours and / or costs
incurred.
Firm Fixed Price (FFP)
• Fixed price quoted to provide goods and
/or services
• Once items delivered and accepted or
milestone is reached, contractor is paid
a fixed price.
• Contractor assumes risk, since it must
perform efficiently and control costs to
make a profit.
Cost plus Fixed Fee (CPFF)
• Estimated materials, total estimated
costs of labor and other direct costs
• Certain indirect rates are included, such
as G&A.
• Fixed fee (by law, cannot exceed 10%
of estimated costs )
• Total estimated CPFF
Direct Costs
• Any cost specifically identified with a
particular cost objective (FAR 31.202)
• “ Allocable” to a specific contract
• Includes labor, materials, Travel
expenses, and other expenses incurred
specifically for a contract during the
performance of that contract.
Indirect Costs
• An indirect cost is one not directly
identified with a single final cost
objective
• Any Costs that cannot be allocated to a
Specific contract
• Most common indirect cost types are
overhead and General & Administrative
(G&A)
Overhead Costs
• Costs incurred to support a business
unit or an operating location that can’t
be allocated to one specific contract:
• Rent, utilities, or other facilities costs
• Phone, Fax, Copier office equipment
and supplies
• Support personnel
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Actions
Costs allocated to a business unit or
Operating location for general
management i.e. Corporate expenses
• Compensation of Corp Executives
• Expenses associated with Corp Office
• Costs of internal functions for entire
company
Time & Materials/Labor Hours
(T&M/LH)
• Sets fixed, loaded hourly rates for
various personnel labor categories.
• Contractor paid fixed rate for actual
hours incurred by each labor category
plus reimbursed for allowable materials
and / or expenses at cost
• Work done on best efforts
CPFF Proposal
• Estimated Direct Labor:
• Show buildup of “loaded” hourly rates
for each person proposed
• Show loaded rate times the number of
hours per person
• Show estimated hours by labor category
and totals
LPTA
• (FAR 15.101), that weight noncost/price evaluation factors and
significant sub factors collectively as
equal to or more important than price
and which involve “tradeoffs” between
non-cost factors and price/cost factors
(allowing for selection of other than the
lowest priced offered or highest .
LPTA
Yet, use of LPTA remains high as the
government seeks the lowest price for
needed supplies and services, in the
face of tight budgets and the depletion
of funds. Successful LPTA proposals
require a different approach than source
selection processes that place less
emphasis on the bottom line
How can you find Competitors
Labor rates
• GSA Schedules of your competitors
You can se what your competition
charges for their Labor rates .
• http://www.gsaelibrary.gsa.gov/ElibMain
/home.do
Use GSA to find your Competitors
• Type in Keyword in Search engine
• See the list of GSA Schedule Holders
• Click on view Catalog
• See labor rates
• Note firms do not have to post Catalog
online
How does the Government
review pricing
• Price quotations received form other
proposals responding to solicitations
• Prior questions and contract prices with
current quotes for same/similar items
• Measurements to highlight significant
inconsistencies that warrant additional
pricing inquires
Other Price Analysis Comparisons
• Competitive price lists, published
market prices of other labor rates
• Other independent government cost
estimates
• Other companies that the Government
has done business with
Summary
• Get out and meet with the agencies
before you bid on any contracts
• Develop a relationship with the Program
Managers and Contracting Officers
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• Know the Competition before you bid
• Have a great Capabilities Statement
Sample Capabilities Statement
Sa
Approach to Marketing
ADVANTAGES VERSUS TIME
Very High
High
Medium
Low
Start of
Program
Agency
Idea Formed
Strategic
Planning
Preliminary
Design
TIME
Adopted
in Agency
Strategic
Plans
Program
Announcement
(Internal)
Preliminary
Draft RFP
Synopsis
in CBD
RFP Issue
Summary
• Thank You
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Questions
Mike Dement
Multimanagement Services
757 725-0506
Mike@multimanagementservices.com