| Course
Description
This FAI-compliant course is part of the Principals
of Contract Pricing curriculum required for all contracting
professionals. It addresses all facets of cost analysis
and provides the student with the knowledge, skills
and abilities needed to conduct cost analysis.
The course employs a combination of lecture-discussion,
case study, and practical exercise techniques to provide
training to cover the comprehensive set of learning
objectives established by FAI. Students learn which
of many approaches to cost analysis should be applied
to different pricing situations. In addition, students
will have the opportunity to use such approaches to
answer particular pricing questions.
The target audience for this course consists of members
of the contract specialist (GS-1102) career path. Other
personnel involved in contract pricing decisions would
find the course helpful.
ACE
Credit Recommendation
In the lower division baccalaureate degree category,
2 semester hours in Business Administration, Federal
Acquisition, Public Administration, Procurement Management,
or Purchasing.
Prerequisites
Acquisition Planning I, Contract Formation I, Contract
Administration I, and Price Analysis
Course
Objectives
Upon successful completion of this course, the student
will be able to:
- Obtain
and analyze cost or pricing data or information other
than cost or pricing data
-
Determine allowability of cost
-
Conduct market research for cost analysis
-
Define and evaluate contractors plan for accomplishing
work
-
Use regression analysis and improvement curves
-
Analyze direct and indirect cost
-
Analyze facilities capital cost of money
-
Analyze profit or fees
-
Prepare a negotiation positionCourse Content
|
| Course
Content |
| Lesson
1: |
Cost
and Cost Analysis Defined |
| |
-Define
contract cost as used in contract pricing.
-Identify considerations necessary for cost analysis.
-Compare cost estimating systems to cost accounting systems.
-Describe cost estimating methods. |
| Lesson
2: |
Obtaining Offeror Information for Cost Analysis |
| |
Given
market research:
-Determine whether cost or pricing data are required.
-Describe the process for obtaining required cost or pricing
data.
-Identify the elements necessary for the proper execution
of the certificate of current cost or pricing data.
-Recognize the need for pricing information other than
cost or pricing data.
-Solicit information from offerors required or otherwise
necessary to analyze proposed costs. |
| Lesson
3: |
Allowability |
| |
Given
cost proposals, market research, and the FAR:
-Identify the five factors to consider in determining
cost allowability.
-Research the specific cost principles in FAR 31.205.
-Classify proposed costs as allowable, unallowable, or
allowable with restrictions. |
| Lesson
4: |
Data
Collection |
| |
Given
market research (including acquisition histories), cost
proposals, and input from the acquisition team:
-Extract relevant data from the market research.
-Develop requests for technical, audit and field pricing
support.
-Critique the findings of technical, audit and field pricing
reports. |
| Lesson
5: |
Evaluating
the Proposed Work Design |
| |
Given
market research (including acquisition histories), cost
proposals, and the findings of technical, audit and field
pricing reports:
-Identify the offeror's planning assumptions, including
contingencies.
-Develop positions on the proposed work design.
-Identify the level of risk inherent in the offeror's
cost estimate and methods for mitigating risks. |
| Lesson
6: |
Direct
Material Costs |
| |
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, and the government's position on the
proposed work design:
-Develop prenegotiation positions on the material mix,
summary level cost estimates, detailed quantity estimates,
unit price estimates, and subcontracts. |
Lesson
7: |
Direct
Labor Costs |
|
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, and the government's position on the
proposed work design:
-Develop prenegotiation positions on the direct labor
mix, direct labor hours, and labor rates.
|
Lesson
8: |
Other
Direct Costs |
|
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, and the government's position on the
proposed work design:
-Develop prenegotiation positions on other direct costs. |
Lesson
9: |
Indirect
Costs |
| |
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, and the government's position on the
proposed work design:
-Identify the elements of an indirect cost rate.
-Define "indirect cost pool".
-Relate the allocation base(s) to indirect cost pools.
-Define the "cost allocation cycle".
-Examine proposed indirect costs to assure compliance
with FAR 31.2.
-Calculate a forward pricing rate.
-Apply the forward pricing rate to develop prenegotiation
positions on indirect costs. |
Lesson
10: |
Facilities
Capital Cost of Money |
|
Given
prenegotiation positions on elements of cost:
-Recognize elements affecting facilities capital cost
of money.
-Identify the steps to calculate the facilities capital
cost of money.
-Calculate facilities capital cost of money. |
Lesson
11: |
Profit
or Fee |
|
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, the government's position on the proposed
work design, and prenegotiation positions on elements
of cost:
-Identify the factors affecting profit/fee analysis and
develop a prenegotiation position on profit or fee using
the appropriate structured approach. |
| Lesson
12: |
Preparing
for Negotiation |
| |
Given
market research (including acquisition histories), cost
proposals, the findings of technical, audit and field
pricing reports, the government's position on the proposed
work design, prenegotiation positions on elements of cost
and profit, and an independent assessment of the proposed
price based on price analysis techniques:
-Identify any differences between the results of cost
analysis and price analysis.
-Recognize how cost drivers, cost risk, and available
tradeoffs with contract requirements affect the prenegotiation
objective.
-Identify key pricing elements in prenegotiation objectives.
-Describe the documentation required to support the government's
prenegotiation position.
-Develop an overall position on the proposed price. |
