Friday, July 19, 2013

Proposal Adequacy - Table 15-2 - Formats

We are going to conclude our four part series on what constitutes an adequate forward pricing submission according to FAR (Federal Acquisition Regulations). Table 15-2 of FAR 15.804 lays out very specific requirements for prospective contractors to follow when submitting price proposals. These requirements have been in FAR for a long time but DoD has recently begun to enforce them and to reject proposals that are not compliant. In some cases, a proposal rejection could end a contractor's quest to bid on a particular solicitation.

Part 1 - Background
Part 2 - General Instructions
Part 3 - Cost Elements

Section III of Table 15-2 specifies how submissions should be arranged. There are three examples provided, one for new contracts, one for change orders, modifications, and claims and the third for price revision/redetermination. We will focus on just the first one - New Contracts (including letter contracts).

The format for new contracts looks like this:

(1) This column lists the various proposed cost elements (e.g. materials, subcontracts, labor, other direct costs, fringe, overhead, general and administrative, FCCM, etc).

(2) The instructions in this column require contractors to enter those costs necessary and reasonable that, in their judgment, will properly be incurred in efficient contract performance.

(3) This column is optional, unless required by the Contracting Officer. Note, many proposals do not lend themselves to unit costing.

(4) This column is a reference to information supporting the specific cost elements. Many rejected proposals do not include adequate supporting data.

Many contractors have pricing applications, either commercially available or self-developed. Some that are designed specifically for Government contracting include summary level information that complies with the requirements of Table 15-2. If your system does not, or if you use Excel and Word to prepare your proposals, just be certain to add a section that summarizes the proposal in a manner that complies with Government expectations.

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