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GTPAC hosts cost/price proposal workshop

May 9, 2019 By Nancy Cleveland

One of the most important skills government contractors must learn is how to prepare a quality cost/price proposal.  Recently, on April 24, 2019, the Georgia Tech Procurement Assistance Center (“GTPAC”), with support provided by The Contracting Education Academy at Georgia Tech, held a free cost/price proposal workshop at the Georgia Tech Global Learning Center in midtown Atlanta, GA.  Attendees at the day-long workshop were provided detailed instruction on cost estimating, cost/price proposal preparation, and how to properly analyze their direct costs, indirect costs, profit, and other factors when determining a competitive cost/price.

“I am extremely happy with the event, and I thought the contractors in attendance asked some fantastic questions about pricing,” said Andrew Smith, Program Manager of GTPAC, he continued, “There are a lot of resources available on how to put together the technical proposal, but a lot fewer resources available, that focus specifically on how to put together a great price or cost proposal.  I think this workshop provides that missing piece.”

The cost/price proposal slideshow materials from the workshop are provided below at no cost.  Permission is granted to other Procurement Technical Assistance Centers (“PTACs”) to use and modify the presentation in conjunction with the delivery of training and other services to PTAC clients.  

“I would encourage government contractors to learn from the materials, and other PTACs to use or incorporate the materials in their own presentations to the business community,” said Smith, he continued, “The slideshow is detailed and high quality and a great resource to take advantage of.”

To download the presentation, click the following links:

Cost and Price Proposal Handout (PDF)

Cost and Price Proposal Handout (PowerPoint)

To view cost/price proposal on-demand webinar training, see the video below:

Filed Under: GTPAC News Tagged With: APTAC, bid price, cost, cost and price, cost and price analysis, cost estimating, GTPAC, price reasonableness, PTAC

Contractors charging more for construction as prices rise

November 21, 2018 By Nancy Cleveland

The prices contractors say they’ll charge for nonresidential construction has made the sharpest increase since 2009, when the Bureau of Labor Statistics began recording them.

In October, prices jumped 2 percent from the previous month and 5 percent from the previous year, marking both the largest monthly and yearly increase on record.

An analysis of federal data by the Associated General Contractors of America suggests that costs have increased even more quickly, rising 6.6 percent year over year.

Keep reading this article at: https://www.lmtonline.com/business/real-estate/article/Contractors-charging-more-for-construction-as-13384074.php

Filed Under: Contracting News Tagged With: BLS, construction, cost, price

What tech trends to expect in FY18

November 2, 2017 By Nancy Cleveland

Earlier this year, Washington Technology shared four technology trends that it predicted would take shape in 2017: IT modernization, the digital connect, data security and intelligence-driven enterprise. Now as we enter the next federal fiscal year, the publication is checking in to see how those predictions have fared – and share some thoughts about what will happen next.

Under the new administration, the most significant trend we’ve seen take shape is not just about leveraging technology to better streamline service delivery, but enabling efficiencies and cost savings across the federal government while doing so.

Since the president’s proposed 2018 budget has not yet been approved, and agencies will likely be working with extensions for a few months at least – not to mention the looming possibility of sequestration, we envision that the focus will remain on investing in, and deploying, and applying technologies that drive outcomes while reducing costs.

Keep reading this article at: https://washingtontechnology.com/articles/2017/10/26/insights-parameswaran-2018-tech-trends.aspx

Filed Under: Contracting News Tagged With: budget, contracting opportunities, cost, efficiency, technology

More than $1 trillion possible in federal savings, says report handed to Trump team

January 25, 2017 By Nancy Cleveland

An organization of IT leaders says the federal government could make changes to save more than $1 trillion during the next decade.

Technology CEO CouncilAnd the Technology CEO Council says its report on how to do it is in the hands of President-elect Donald Trump’s transition team — including Vice President-elect Mike Pence and incoming White House Chief of Staff Reince Priebus.

The potential savings include $500 billion through supply chain and acquisition reform; $205 billion in potential reductions through using big data and analytics as well as cognitive computing to make decisions; and $110 billion through IT modernization.

strong federal cioThe report was released publicly Thursday, but a TCC spokesperson told FedScoop that IBM CEO Ginni Rometty shared it last month with the Trump team during the much-documented meeting of tech executives with the president-elect. TCC is the self-described “leading public policy advocacy organization” for the information technology industry, made up of exclusively IT company CEOs.

The federal IT community has not yet seen many direct indicators of how its work might be affected by Trump’s presidency. The report outlines paths the administration could take toward reducing government spending. Bruce Mehlman, executive director of TCC, said those ideas would not mean fewer government services.

Keep reading this article at: https://www.fedscoop.com/trump-federal-it-report-1-trillion-technology-ceo-council/

Filed Under: Contracting News Tagged With: budget, cost, IT, savings, technology

To keep winning federal contracts, small businesses say they have to spend more

January 11, 2017 By Nancy Cleveland

amex-openSmall businesses upped their efforts to bid on federal contracts, reporting a 72 percent increase in time and money devoted to winning a share of the government’s $90 billion procurement budget, according to the latest annual survey from the American Express OPEN for Government Contracting initiative.

Though overall federal contracting is down 19 percent in fiscal 2015 from fiscal 2010, the survey — completed last summer but released last month — found that, on average, small businesses spent $148,124 in time and money to bid for federal work. That’s a 72 percent increase over the past six years, and a 15 percent increase since 2013.

The most active contractors, however, are the largest, the AMEX study found. Those with 50 or more employees and $5 million or more in revenues report being more active than they were five years ago, versus 34 percent that are less active and 29 percent making the same effort as before.

Keep reading this article at: http://www.govexec.com/contracting/2017/01/keep-winning-federal-contracts-small-business-say-they-have-spend-more/134380

Filed Under: Contracting News Tagged With: competition, cost, federal contracting, federal contracts, small business

Contractors see some goodies in big Defense bill

June 2, 2016 By Nancy Cleveland

LPTA addressed in 2017 NDAAThe grab-bag $610 billion defense policy bill now at the halfway point in its journey through Congress has the contracting community upbeat about some procurement and small business reforms while wary of debate about the extent to which defense contractors will be subject to President Obama’s Fair Pay Safe Workplaces executive order.

A version of the fiscal 2017 National Defense Authorization Act passed the House May 19 by a 277-147 vote, while a slightly different version cleared the Senate Armed Services Committee the same day 23-3.

“Building on last year’s initial set of improvements to the acquisition system, the FY17 NDAA makes foundational reforms intended to help get better technology into the hands of the warfighter faster and more efficiently,” said a summary by House Chairman Mac Thornberry, R-Texas. “It does so by requiring weapon systems to be designed with open architectures that can easily be upgraded as technology and threats evolve. It also provides flexible funding to experiment with new technology, while simplifying the process and expanding the avenues of competition for suppliers of all sizes.”

Keep reading this article at: http://www.govexec.com/contracting/2016/05/contractors-see-some-goodies-big-defense-bill/128541

Filed Under: Contracting News Tagged With: acquisition reform, capabilities, Congress, cost, House, innovation, LPTA, NDAA, procurement reform, Senate

Differing site conditions claims: Focus on actual costs incurred

March 15, 2016 By Nancy Cleveland

Today, we have a question for our federal construction readers:

If your project is operating within an anticipated budget, are you still entitled to the additional costs associated with a differing site condition? 

Recently, the Civilian Board of Contract Appeals (CBCA) answered our question with a resounding yes.

hardhatThis point is particularly important in the context of requests for equitable adjustments or claims asserted against the government.  You may think (or the government may try to convince you) that there is no entitlement when the project is below budget.  That is simply not the case.  The CBCA decision makes the point that damages are based upon the actual cost of performance — your bid should not be used against you.  In short, extra costs due to differing site conditions should always be tracked and documented — even if you are meeting or below a projected budget.

The case in question involved construction contractor Tucci and Sons Inc., which filed a claim seeking more than $80,000 on a DOT Federal Highway Administration (FHWA) contract for the reconstruction of a 9.7 mile stretch of highway in Mount Rainier National Park.  Tucci claimed that it experienced extra costs based on the unexpected need to work around a number of larger boulders impeding the work.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=470494

Filed Under: Contracting Tips Tagged With: actual cost, CBCA, Civilian Board of Contract Appeals, claim, construction, cost, damages, delays, FHWA, site conditions

GSA updates strategic sourcing tool for office supplies

December 6, 2013 By ei2admin

The General Services Administration in late November published a draft update of its seven-year-old strategic sourcing initiative aimed at reducing the costs of agency office supply purchasing.

The new statement of work titled “Office Supply Third Generation,” or OS3, is “the agency’s latest effort to cut costs and increase efficiencies by buying everyday supplies like pens, paper and printing items from a list of vendors with negotiated low prices,” GSA said in a release. It is expected to save $65 million a year in reduced administrative costs and $90 million through lowered prices, with 76 percent of purchasing contracts going to small businesses. Since 2006, the program has saved agencies $350 million, according to GSA.

Keep reading this article at: http://www.govexec.com/contracting/2013/12/gsa-updates-strategic-sourcing-tool-office-supplies/74702 

Filed Under: Contracting News Tagged With: cost, GSA, SBA, small business, small business goals, strategic sourcing

DLA to make major changes in contractor shipping requirements

July 1, 2013 By ei2admin

The Defense Logistics Agency (DLA) plans to make big changes in its contractor shipping requirements.  The changes will take place in October 2013, so if your business sells products to DLA, now is the time to get ready. 

DLA’s new shipping requirements are called First Destination Transportation (FDT), and the new rules apply to the movement of material from suppliers to the first military depot or direct to military customer.  In these instances, shipping will change from FOB destination to FOB origin.

  • FOB is an abbreviation for free on board.  This term is used with the designation of a physical point to determine the responsibility and basis for payment of freight charges and, unless otherwise agreed, the point at which Title for supplies passes to the buyer of consignee.  (The policies on designation of contracts as FOB Origin or FOB Destination are set forth in FAR 47.3.)
  • Irrespective of whether a contract is designated as FOB Origin or FOB Destination, the government bears the cost of shipping (either as part of the item price under FOB Destination or separately under FOB Origin).   An important consideration between the two designations, however, is who bears risk for damage or loss of the item during shipment.  Typically, under FOB Destination, the seller bears the risk of loss or damage to the item during shipment.  Under FOB Origin, the buyer typically bears the risk of loss or damage to the item during shipment.

Slated to begin with solicitations and awards in late October 2013, DLA’s new FDT rules will require the removal of transportation-related cost from contractor bids.  Shipping will be designated FOB Origin, thus contractors need only be concerned with quoting the associated costs of manufacturing their products.  Products affected by the October roll-out will be those labeled as Class IX consumables and some Class IV and VII materials to CONUS destinations. Supply Chains included in the FDT initiative are: Aviation, Land and Maritime, Construction and Equipment, and Industrial Hardware.

According to DLA, the new FDT rules mean that geography will no longer play a part in competitive bidding because distance-based shipping expenses will not have to be factored into bids.   The drawdown of troops from Afghanistan signals a reduction of necessary parts and supplies to U.S. troops.  Contractors who utilize this change in transportation terms, and find additional avenues for cutting costs, will find their reward in additional business opportunities.

In these uncertain budgetary times, DLA is challenged to decrease costs at the same time as being challenged with increased support to the troops in both the U.S. and abroad.  It is DLA’s goal to take control of its supply chain by improving in-transit visibility (ITV) and dock productivity as well as safety stock requirements.  ITV offers opportunities to consolidate.  Loading fewer, fuller trucks increases DLA’s effectiveness and reduces its carbon footprint.

Once the FDT rules become effective, vendors are advised that before  submitting a bid (minus the cost of transportation), they will need to Log In and subscribe to DLA’s Vendor Shipment Module (VSM).   VSM is the vehicle by which vendors will notify DLA’s transportation team that a shipment is ready for pick up.  No matter the size or weight, VSM will assess the information provide by vendors, assign the carrier best suited for the shipment, and notify the vendor of the carrier choice. At that time, VSM will allow each vendor to access its own contract information in order to print a commercial bill of lading, military shipping labels, packing slip, address labels and small parcel carrier labels.

For VSM registration and instruction, please click on the link below.   A Help Desk is available and can be reached by email at delivery@dla.mil or by phone Monday through Friday, between the hours of 6:00 am and 6:30 pm Eastern Time, at 800-456-5507.

Will you be ready for this change in October 2013?  Now is the time to register for VSM:  https://vsm.distribution.dla.mil/   Watch for solicitations that use the freight term FOB Origin, and don’t forget to sharpen your pencil!

For more information on FDT, visit: http://www.dla.mil/FDTPI/Pages/default.aspx#transportation.

Filed Under: Contracting Tips Tagged With: competitive bid, cost, cost reduction, DLA, First Destination Transportation, FOB destination, FOB origin, shipping

OMB announces final guidance on inherently governmental functions

September 13, 2011 By ei2admin

Long-anticipated final guidance on “inherently governmental functions” is set for publication on Monday and should clarify confusion over blurred lines in agencies’ understanding of which types of work should be outsourced, top officials at the Office of Management and Budget told reporters on Friday.

The final policy letter, said Chief Performance Officer Jeffrey Zients, “helps agencies do better at balancing contracting out with management by federal employees. The mix was out of balance and we think this protects the public interest. Given our fiscal situation today, it is important more than ever that taxpayer money be well spent.”

With a few exceptions, the guidance, which takes effect Oct. 12, is similar to the draft released in March 2010, said Dan Gordon, administrator of the Office of Federal Procurement Policy. “But it is a milestone” that follows up on a memorandum of understanding about reducing waste in contracting issued by President Obama in March 2009.

The document includes lengthy lists of functions that are clearly inherently governmental and separate lists of “functions closely associated with the performance of inherently governmental functions” — where agencies can use more discretion.

One difference in the new guidance is a provision intended to “clarify the confusing and controversial” policy on the contracting out of military security operations, Gordon said. If a function is part of combat or could evolve into combat, then contractors can’t be used. “We benefited on this issue from public comments from the private sector, agencies, nonprofits and the Hill,” he added.

A second departure is a provision intended to help small businesses. “It places a lower priority on in-sourcing if the function is not inherently governmental,” Gordon said. “Insourcing is not a goal, but agencies need to understand that if an inherently governmental function is improperly contracted,” they can lose control of the work.

The administration “is sensitive” to realities of the current budget crunch, Gordon acknowledged. “We need to demonstrate fiscal responsibility on both sides” of the contracting process, he said. “We don’t want to dramatically increase [full-time equivalent] levels on the federal side, but in today’s fiscal world, the solution is not massive contracting out,” nor is it massive insourcing.

Zients presented the letter in the context of the administration’s two-and-a-half-year-old effort to trim waste by curbing contracting “after its uncontrolled growth under the prior administration.” One in six federal dollars is contracted out, and the rate, mostly in services, doubled since 2008, he said. But 2010 marked the first time in a decade that the level of contracting decreased, by $80 billion.

Examples of smarter contracting, Zients said, include “strategic sourcing,” such as pooling purchases of office supplies, which can save as much as 40 percent. “Rather than buying like 100 medium-sized businesses, take advantage of the fact that the United States is the world’s largest purchaser,” he said.

Another means is cutting spending on management support, which quadrupled over the past 10 years, he added. “In information technology and acquisition, management support produces many wasteful and unnecessary consultants’ reports that sit on a shelf.” That approach will reduce expenses by 15 percent, or $7 billion in fiscal 2012, he said.

Focusing on interaction with contractors, the administration also has “strengthened suspension and debarment” processes, Zients said, stressing, however, that “contractors do valuable work and will continue to do so.”

Over the past year and a half, Gordon said, the outsourcing-insourcing issue has been reviewed most thoroughly by the Defense and Homeland Security departments, a process now largely complete. Most agencies have already been working under the principles of the final guidance, he said, so its release won’t prompt major shifts.

Critical functions differ by agency, Gordon said, but the letter provides “clear direction to managers responsible for policy on the closely associated functions to make sure that the agency can control it and that the work doesn’t expand.”

The problem, he said, though “now largely corrected,” has been that some agencies, for example, would have a contractor write a statement of work and then award the contract to that same company. In managing IT functions, he added, he’s heard federal managers say that “no one in-house understands the work and that they’re completely dependent on the contractor. It’s intolerable.” The solution, he said, might be limited insourcing, adding two to three people, or simply applying more attention.

The guidance’s definition of inherently governmental, as in the draft, is based on the 1998 Federal Activities Inventory Reform Act, and Zients said the letter’s other changes, though small, would require adjusting the Federal Acquisition Regulation to conform.

Dozens of interest groups had been following the evolution of final guidance on what is inherently governmental.    “We are pleased OFPP has retained flexibilities for agencies to determine what functions are considered closely associated with inherently governmental functions or are critical functions to agency missions and to provide for these functions in a way that best meets their needs and capabilities,” said Stan Soloway, president of the industry group the Professional Services Council. “However, we are concerned that the list of closely associated functions could be misconstrued as a ‘do not contract’ list, even though it is not the case, nor OFPP’s intent. The checklist that identifies closely associated functions must not become a barrier to contracting for work where it is appropriate to do so.”

Scott Amey, general counsel of the watchdog group the Project on Government Oversight, said he is impressed with the guidance. “The policy comes clean about the government’s over-reliance on contractors and improves the categories of activities and functions that shouldn’t be performed by contractors,” he said. “Private security in combat areas was never a good policy, and OFPP’s changes will ensure that properly trained and mission-responsible government personnel conduct such work.” He wonders, however, whether agencies will actually retain or insource work that his group believes should be performed by public servants.

Steve Amitay, federal legislative counsel of the National Association of Security Companies, said on Friday that absence of any mention of “building security” in the guidance “validates the continued successful use of contract security by federal agencies. Furthermore, given the decades of effective and efficient use of contract security by federal agencies, any agency that is considering insourcing security jobs should, as the policy states, be required to conduct an in-depth, comprehensive cost-analysis of such a move.”

— by Charles S. Clark – Government Executive – September 9, 2011 – http://www.govexec.com/dailyfed/0911/090911cc1.htm?rss=getoday&oref=rss

Filed Under: Contracting News Tagged With: cost, debarment, inherently governmental, insourcing, OFPP, OMB, outsourcing, strategic sourcing, suspension

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