Adequate Contract Pricing Proposals

FAR contains detailed guidelines for preparing and adequately supporting price proposals. Proposals that do not comply with these guidelines are at risk for being returned to the offeror and could easily result in the offeror's disqualification. Someone in the Government will typically perform an adequacy determination. This could be a contracting officer or analyst in the buying command, someone in the administrative contracting office, or an auditor. Most organizations have checklists to help their staff make the adequacy determination. If deficiencies are minor and the Government does not believe that they will significantly impede the negotiation/contract award process, the proposal will be considered adequate. On the other hand, proposals with significant deficiencies significantly slow down the audit, price analysis, negotiation, and contract award process. In order to maximize resources, the Government is becoming less understanding and less tolerant of proposals that do not meet the FAR guidelines.

Specific guidelines for proposal preparation are found in FAR 15.408 and in Table 15-2. Any company preparing proposals for Government contractors should be intimately familiar with these sections.  Following is a listing of the significant proposal elements that, if missing, could result in an inadequacy determination.

1. Properly completed first page (see Table 15-2, Section I.A).
2. Index referencing all cost or pricing data and information accompanying or identified in the proposal (see Table 15-2, Section I.B).
3. Summary of total cost by element cross-referenced to supporting cost or pricing data (see Table 15-2, Sections I.D and I.E.)
4. Identification of cost or pricing data and an explanation of the estimating process to include judgmental factors and methods used in the estimate, including those used in projecting from known data and the nature and amount of any contingencies (see Table 15-2, Section I.C).
5. Identification of any incurred costs for work performed before submission of the proposal (see Table 15-2, Section I.F)
6. Identification and description of any agreements with Government representatives on use of forward pricing rates and factors (see Table 15-2, Section I.G).
7. Consolidated bill of materials (see Table 15-2, Section II.A).
8. Price analyses of all subcontract proposals and cost analysis of subcontracts when cost or pricing data is required (see Table 15-2, Section II.A).
9. Cost analysis of proposed interorganizational transfers (see Table 15-2, Section II.A.(i)).
10. Time phased breakdown of labor rates and hours by category or skill level and the basis for the estimates (see Table 15-2, Section II.B).
11. Calculation of indirect rates (see Table 15-2, Section II.C).
12. Identification of ODCs and basis for pricing (see Table 15-2, Section II.D).
13. Royalties and license fees (see Table 15-2, Section II.E).
14. Facilities Capital Cost of Money (see Table 15-2, Section II.F). It is important to note that in order to recover FCCM on a cost type contract, it must have been proposed.
15. For change orders, modifications, and claims, proposals must include current estimates for deleted and added work (see Table 15-2, Section III.B).

Besides the standard requirements found in FAR 15.408, Agencies often add additional submittal requirements. These additional requirements will be identified in the solicitation (RFQ/RFP) and adherence to these could also become critical to the success of your offer.