What Is a Contract Cost Analysis

(vii) Analysis of data other than certified cost or price data (as defined in point 2.101) provided by the Supplier. 2. Cost realism analyses shall be carried out in the case of reimbursement contracts in order to determine the expected service costs for each provider. (c) the adequacy of estimates generated by properly calibrated and validated parametric models or cost estimation relationships; and (6) Recommendations or conclusions regarding the government`s review or analysis of a vendor`s or contractor`s proposal may not be communicated to the bidder or contractor without the consent of the principal. Any discrepancies or errors of fact (e.B. Duplications, omissions and calculation errors) contained in certified cost or price data or data other than certified cost or price data submitted in support of a proposal must be brought to the attention of the client for appropriate processing. Contract agents use cost and/or price analysis to determine that prices are fair and reasonable. The method and scope of the analysis depend on several factors, including the dollar value and the urgency of the contract. Cost analysis is the evaluation of individual elements (e.g. B works, materials, etc.) that make up a contractor`s total cost proposal or price (both for new contracts and changes) to determine if they are eligible, requirement-oriented and ultimately appropriate. Cost analysis is used whenever you don`t have price competition. A cost analysis is required if: F.

Circular 4220.1.F states that recipients must conduct a cost or price analysis as part of any procurement measure, including contract amendments. We execute an amendment order to include a preliminary amount of $50,000 in the contract amount. (a) the necessity and adequacy of the proposed costs, including provisions for unforeseen events; (ii) Assess the impact of Supplier`s current practices on future costs. During this assessment, the client must ensure that the effects of inefficient or unprofitable practices in the past are not projected into the future. When pricing the production of recently developed complex equipment, the entrepreneur must perform an analysis of trends in labor and basic materials, even in times of relative price stability. One. The FTA did not set a dollar threshold for the completion of cost proposals for contractors prior to the award of the contract. The FTA requires recipients to conduct a cost analysis of a contractor`s cost proposal where there is no reasonable price competition to determine the appropriateness of the proposed price. The Procurement Manual on Best Practices (BPPM) explains the requirements for cost and price analysis in Section 4.6.

The BPPM is available online: www.transit.dot.gov/funding/procurement/third-party-procurement/best-practices-procurement-manual. One. A fellow should perform a cost analysis for all individual purchases. A negotiated price with the government for a GSA contract would not constitute a «cost analysis». A cost analysis should look at the proposed labor rates, overheads, rates of return, etc. It cannot be assumed that the GSA conducted a cost analysis of the consultation rate; (e.B. the tariff may have been fixed on the basis of reasonable price competition. But even if the GSA were to perform a cost analysis, the question would arise as to what details of the costs submitted to the GSA for this procurement and whether the cost elements for your procurement were still up-to-date and valid. Cost projections and success rate that might have been appropriate for the GSA contract may not be appropriate for your contract. Issues such as the duration of the contract, the degree of risk assumed by the contractor under the terms of the contract you are using in relation to the terms of the GSA, the location of the work (a factor that could affect the overhead costs to be negotiated), etc. GSA`s contract prices would be a point of comparison if one were to do a «price analysis,» but again, you should take a close look at the details of each supply, as mentioned above. (Comment sent July 2010) The obligation to perform a cost analysis is not determined by the type of contract [e.B.

time and material (T&M), cost plus fixed costs (CPFF), fixed fixed price (FFP)], but by the relevance of price competition in your supply action. If there is reasonable price competition, the beneficiary may determine that the successful tender or tender offers a reasonable price, given that the prices proposed by other contractors demonstrate the appropriateness of that successful tender or proposal. For service contracts that may use the T&M or CPFF contractual approach, it can be difficult to determine the quality of the workload of an offer from one contractor to another, and since the contractor does not promise to deliver a product to an «objective» specification, it may be impossible to simply compare the proposed billing rates for different categories of work and perform a «price analysis» of the proposals. You should ask suppliers for a detailed breakdown of costs and review estimated labor costs, overhead, and the adequacy of the proposed rates of gain. If you have a T&M contract where billing rates have already been set by the terms of the contract, and the contract states that change orders will be evaluated at the billing rates stated in the contract, no analysis of the rates themselves is required, but you should still review the estimated cost of materials and document your record that the rates used will be in accordance with the terms of the contract. With regard to the award of a new T&M contract, we cannot think of any circumstance in which no cost analysis is required for cost elements not specified by law. (Comment sent July 2010) FTA has published a «Price Guide for FTA Beneficiaries», which is available online. Section II of this guide provides several ways to perform a price analysis that you should find useful. One. The wording suggested in your instructions is generally acceptable; However, we recommend that you add a statement that the recipient of the application must document their estimate in some form so that it can be part of the procurement file/record. (Comment sent July 2010) (3) To assess the reasonableness of each cost component, cost analysis shall be used if certified cost or price data are required. Price analysis should be used to verify that the total price offered is fair and reasonable.

One. We are not aware of any industry benchmark prices for the hourly rate for consultants who would provide technical services as you describe them. .