Archive for Pricing and Cost

Grow Your Business, Subcontracting!

verhuis1  Don’t Let This Be Your House

This house is the house of many who are struggling with their small businesses right now. I have sent my workers to take it away and replace it with a win-win house of prosperity.

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This house is owned by someone who does subcontracts with the Government.  This is a win-win house of prosperity.

It may seem like a whole lot of extra trouble to do subcontracts with the Government but remember: The process for doing well with your subcontracts is easily taught. The government always pays its bills!

There is a big demand for GOOD subcontractors who know what they are doing.

You need to do a good job and build a significant past performance. The key is to manage your contracts like projects and to learn the metrics and analyses that keep things easily monitored and controlled.

And when you are at the end of the subcontract, you need to close it out. This means that it is done  and you are not billing incorrectly on your final payment.

So, you need to stay in compliance with the regulations regarding subcontracts in the Federal Acquisition Regulations (FAR).  This is accomplished by understanding the FAR and looking up the clauses that are given in the subcontract.

Subcontracting opportunities are listed on various databases. These databases exist in an effort to keep a supply of small businesses available for the Government and to be assured that small business will get 30% of the Government contracts awarded.  This is a regulation!

Past performance can be documented through a method called The Subcontract Project.  Anyone with project management experience can easily follow this methodology. Bid on opportunities and network with other small businesses. Involve yourself with forming teams of competent vendors that join together and create an effective work plan.  When you win, you will need to manage your subcontract from the very start.

With templates and good old fashioned hands on experience, you can become a certified subcontractor and this will make the Prime look twice at you in its hunt for small businesses to subcontract. After all, you have been trained and have demonstrated your knowledge of the things that matter the most to your Prime contractor.

Subcontracts are also negotiated regarding terms of payment. You can, as a subcontractor, negotiate for net 30 or even payment bimonthly based on the fact that you are a small business.

The Statement of Work is given to establish the explicit expectations of the work you will do. Follow it and your other terms and conditions. Then document your success!   The most important part of the proposal, aside from the actual financial bid, is proof that you have done well in the past and will continue to do well with the new assignments from the Prime contractor.

In order to prosper more in this economy, put yourself where the money is.  Understand that it is mandatory that you, as a small business, are sought to do work that the Government has to offer.

How long does it take to make the transition into Government subcontracting? Simple! It could be one day or months, depending upon your level of understanding of the process and the project of a subcontract.

You must be registered as being approved to do work for the Government by being registered on www.sam.gov .  There are codes and other formalities but you can be guided through the steps move through it quickly. Once you are in www.sam.gov , you are visible to all Primes looking for someone who does your work.

Subcontracting is said not to be as lucrative as being a Prime and contracting directly with the Government. In my opinion and with my experience, although your profit may be lower- in the long run, you will do well to become a popular subcontractor and reap the rewards of your past performance and naturally progress into the position of bidding directly to the Government.

Consistently working and consistently getting paid is a more lucrative choice.  There are no collection agencies necessary in your life when working for the Government. There is no advantage to withhold money from you in this industry as you are always working under strict regulations. So, you won’t be calling on collection agencies with Federal Government subcontracts.

Reach out to me if you are interested in The Subcontract Project class. Sign into my website at www.thecontractnavigator.com .  Dates and times will be sent to you.

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Contract Connections Administration Services, LLC

410-302-6251

Cheryl Ann De Pace, Director of Operations

Understanding your Proposal

What’s it all about?

Pulling in that proposal and really understanding it is of utmost importance. There is no other way to approach the task. There is no specific way to better understand than to read it and read it well. This puzzle will teach you the keys to doing this in nine (9) short words/letters. Complete it and learn them and you will understand what to do when you get it in your hands to begin your journey. It is a journey and one that can be most rewarding, as you know.

Enjoy! And be sure to keep the answers. The letters are surrounded by asterisks to give them substance so they will fit in the puzzle so don’t forget to use them and cross off your letters as you use them. They are only used once.

Cheryl DePace

Director of Operations

Contract Connections Administration Services, LLC

410-302-6251 (Call me with any questions you have.)

Proposal Crossword Puzzle

Cost Estimates in Contract Administration

 

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Over the past 12 years, I have prepared many cost estimates. Some of them were part of a proposal for winning a contract and others were my analysis of the funding and estimates I received.

As a tool, a cost estimate is very valuable. Using the cost elements and the way that they change form as the contract process proceeds, is a way to watch the activity of subcontractors and your own expenditures. I will explain what I mean.

By using your Contract Brief to monitor and control your contract, you will naturally use the built in calculator to show the change in the dollar amounts as expenditures occur. Once a month you will be looking at the financial progress report and the bill for comparison. You will enter the updated numbers and the calculator will show you the following things:
• Rate of monthly expenditure (Is it flowing in a way that ensures that there will be enough money until the end of the project?)
• Percentage of expenditure (Is it getting close to that time where a 75% letter needs to be done?) (Is this a contract with a level of effort clause and is the expenditure reaching or passing the percentages required?)
• Have the labor rates changed? Are the employee names the same?
• Does the amount of money for Other Direct Costs showing as expended go well with the planned budgeted amount?
There are many questions that can be asked. The list goes on. The key is to know that a cost estimate is not just a one time thing that you do to obtain funds.
Whether you maintain an ongoing cost estimate for your project (your project manager does this in his management of the project), or incorporate the ongoing cost analysis in your Contract Brief, you win if you track your costs every month from the perspective of the contractual numbers. They will show errors and/or shown to be in error, if you focus on what the contract is showing and compare it at the end of the month with the coinciding bill.
On my website, I have a copy of a cost estimate that does not show indirect rates because it is a typical version where proprietary information is protected. When analyzing your own costs, you can use a different version (also attached) that will show your indirect rates and what leads to your burdened rate. Does this sound like a foreign language? Go to my website and click on the Blog tab and look for this article. I will have the attachments there on my website.

Call me or email me if you have any questions. www.thecontractnavigator.com contractsconnections@gmail.com .
If you have a pricing background, it will support your talents as a contract administrator. There are many times when the numbers really count. (Pardon the pun.) If you need to, take pricing classes and learn more about pricing. I recommend this whole-heartedly and applaud your efforts. Your team members will be greatly assisted by your ability to drill down deeply into what is going on with your Prime contracts and your Subcontractors.
Believe me when I tell you that the real story is in the numbers. When you have the numbers in order and they match, you can see beyond the face of the cost estimate and make important observations that will mean a lot later.
I hope you enjoy my cost estimate format. It is not official and yours may be better and easier. I give both versions to you so that you may work with them if you want to feel them out.
And remember that you can go to my blog and find the articles on my Contract Brief. There is a cost estimate of a more general analysis type built into the Contract Brief that will keep everything on the dollars for the contract in order and ready for an immediate answer to an executive inquiry.
“What was the amount left on that contract, Thom?” (About 20 seconds later, the file is opened and Thom is standing there in front of the President…) “Why it is $256,987!” And the President asks, “Are they spending their money faster than they should be?” And Thom immediately tells him that the subcontractor’s burn rate is increasing little by little but steadily over time. The President thanks him.

And that’s that!

Work Breakdown Cost Sheet UNSANITIZED   

Work Breakdown Cost Sheet

Get Your Man-Year Hours for your Proposal

time0225[1]Project Hours for Cost Estimates

Hold down your control button and click on the link above. This is an unprotected labor hour worksheet for helping you with your Government Man-Year. In consideration of paid sick days and leave paid by your company, you must pare down the days you count for the Government to pay according to your scheduled hours. The Government Man-Year is typically 1960 hours. If you read your RFP and it does not indicate a specific number of hours for your man year for your bid, then you can call your point of contact to make sure you get the right number. The primary reason and purpose of this chart is to show how the differences in the hours can be considered for the bid and for the determination of price. The days you pay for an employee are counted in your Fringe which is built into your burdened labor rate. It cannot be counted twice.

This is an Excel spreadsheet and is open for you to change and use according to your company hours and how you want to bid the hours given to you for your proposal. Be careful to note where there are formulas and where you can type in your own data. You type the Government Man-Year hours yourself, always based on your analysis. This tool is very close to what you will find your bid on most proposals. If you mess it up, come back and get it again. That is just fine.

Please call me if you have any questions at 410-302-6251!

Documenting Your Contract Award is of the Utmost Importance.

thReview your WIN!

At time of award, there is excitement and a tendency to only read those items that pertain to the work that will be required. Reading the other sections of the contract may advise you more of the administrative duties of the contract.

Do well with this part of the work on your contract and develop a good relationship with your contracting officer. Documenting it makes it clear and accessible. Just as your contracting officer takes copious notes on your correspondence, you should take the same care to document your file.

So, let’s go through the sections of the contract, briefly and assist with starting your process with documenting it.
1) Form SF33 is the contract from the Government. The first page is the base form where all of the primary data is written such as dollar amount of award, period of performance, name and address etc.

2) Section A outlines the basics. The following are items that should be in your contract brief: type of contract, deadline for return of forms, mailing address of the government office and the name of your Government contract point of contact. Note: The deadline for return of the forms is set in stone and created to facilitate a timely full execution of the contract.

3) Section B breaks down the way the money is to be spent and what kind of time restrictions there are on the length of time that the money will be available. The importance of the total funded and the total awarded is not the primary consideration. This section should be read line by line and there should be an understanding, if there are option years, if contract line items will expire sooner than others. If this information is broken out on a timeline, it will be much easier to manage the dollars awarded. This is mostly attributed to the fact that funding does not run along side of the awarded ceilings. The key is to spend the money fully by following the request for your company to track the expenditure of the funded amounts and contacting the Contracting Officer when funding is getting low for the work to be accomplished in time for more funding to be awarded with modification of the contract line items.

4) Section C is the section where you will read the descriptions and specifications of the Government’s requirements of the work of the contract. The Scope of Work can be found in the RFP under this same section and clarifications of any changes made after the award was made can be found here. Do not assume that the changes are not important and be sure to read all modifications of the RFP regarding the work that are brought forward during the contract competition.

5) Section D outlines what is called the “specific packaging and labeling requirements”. All correspondence, before and after the contract award, must follow these directions to the letter.

6) Section E will describe the inspection of the deliverables and the process/ quality assurance requirements that must be met in order for a deliverable to be found acceptable. If a deliverable is not found to be acceptable, the Contracting Officer will contact you and the work will need to be revised to meet the specifications in order for the work to be cleared so that more funding will be given or for the contract to be completed. This is very important information to have as the release of funds depends on approval of the work.

As you go through your contract, you will note much more that needs to be documented than the simple outline I gave you here. The most important document in your files, other than your contract, is your Contract Brief. A good contract brief requires a lot of thought and understanding of the contract administration process.   Click Here to Download the CCAC Contract Brief

If you have any questions or want to have the contract brief altered to suit your company specifically, give me a call anytime at 410-302-6251. 

   

 

 

Closing Out your Contract Files

My expertise is clarifying the things that you must do in order to make sure that your contracts are administrated correctly. I am not referring to processing. I am referring to following the regulations in the FAR and having them in tip top shape for an audit. We know that day will most certainly come.
So allow me to share with you, from FAR 4.804, plain and simple, beginning with a general list of what must be contained in the contract file.

You can read this and understand what I will be looking for to put your file together as you require.
It is difficult enough to do the bids and proposals and win the business and then process the files, do the negotiations and do the modifications. In the end, that file has to be right.

Most importantly, it does not take a full time employee to do this job if the task is taken by a consultant who has the ability to work with the documentation and put it all together without delay. A closeout should not be an on-going process. If it is completed as soon as it is appropriate, it is most effectively presentable for audit purposes. There is a tremendous reward in getting your close outs right and doing them on time. All of what you have worked for and managed has to be finished for good so that you can leave it behind.

This is a general checklist. A complete list can be found in the FAR when unusual circumstances arise. I hope you find it helpful.

1. Copy of the contract and all modifications, original supporting documents- in ascending order according to action date.
2. If applicable, modification of the assignment of contract administration function and responsibility.
3. Pricing/ Certificates of Current Cost or Pricing Data and all other documents supporting contract action executed by the Contract Administrator(s). This is the budget as it relates to the RFP and how the work is tied to it in the form of deliverables or how the billing will then be determined.
4. Notice to Proceed and Stop Orders
5. Insurance Policies that apply to the contract action.
6. Documents supporting advance or progress payments
7. Property administration records
8. Termination Actions
9. Cross reference to documents filed elsewhere. I call this the Contract Brief.
10. Miscellaneous documents on which action was taken or that reflect actions by the contract administrator(s). This is where you put your extra work, letters, emails, explanations, conversation logs, etc.
11. Contract completion documents. This is where your close out documents go and the supporting documentation that goes with it.
12. Paying office file: Bills, invoices, vouchers, and supporting documents to include a record of payments or receipts.
13. Other back up documentation that is pertinent to the interpretation and understanding of the payment process.

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The Monumental Importance of a Contract Brief

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What is a contract brief?

A contract brief is a synopsis of all the contract requirements that you have to meet. It is designed for the executive level review whenever the contract comes to their attention for negotiations or questions. This is like an executive summary that is written at the beginning of a proposal so that the executives don’t have to read the entire proposal to know what it is about. If a contract administrator does not have a contract brief in her contract file, she/he is not able to identify key points of interest without digging through all of the pages. A simple fact such as the amount that the contract is funded can be buried and take minutes to identify.

 

I have always created processes for my employers and the contract briefs I created are no different. I have created two different kinds and they were created to go with the work flow of the office. This is because many people will be needing information about the contract and for many reasons. The easiest place for them to look is in the area where they work on the contract. So, in an organized fashion, the sections of the contract brief are organized in a step by step fashion.

With a contract brief created in Excel, you can have sections that calculate themselves. When you see the generic contract brief that I have for you in our free tool box, there will be sections that will add and divide and present percentages and other such things for executive and administrative review. The format is easy to look at and simply to use. The information should follow the order in which things are done on the contract under the average circumstances. This is a form that will greatly reduce stress in handling your contracts requirements. The contract is a document that has serious repercussions should it be loosely followed and parts of it neglected. Time is gained when it only takes a moment to find information. Executive level reviews do not require longer meeting times. All in all, the contract brief is almost like a living and breathing document instead of a static page that contains a reiteration of what you already have buried in your contract. No amount of sticky notes can make up for the way a contract brief puts you in control of your contract information.

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I am excited to tell about the possibility of having a custom-made contract brief made to fit your day to day operations.

You can purchase your own live copy in Excel format right on this site! I will send it to you by email. The cost for this contract brief is negligible for the monumental task that it performs. Follow it and you will have full control of your contract for the entire time you are processing it. Not only will it save you time, but it will save you revenue. There will be no money left unspent if you follow this process. There should be a full utilization of budgeted items and a good eye on the monthly average rate of expenditure for progress reports.

 

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A custom made contract brief takes one day to create. Interested? Go to my Home page and fill out the request form with your email address and name.

 

 

Read Subpart 4.12—Representations and Certifications

 

Filling them out and understanding the questions.

The link in the FAR indicates the URL to that site is: https://acquisition.gov. You must be familiar with SAM (System of Award Management) in order to do your Federal Government Contracting.

Below, is a list of information that you have to include in your Registration with SAM and you cannot participate in Federal Government contracting unless you are registered with SAM. Also, A CONTRACTING OFFICER CANNOT READ YOUR REPS AND CERTS unless they are in ORCA. You must keep a completed print out of this document off of ORCA in case there are any questions or adjustments that come to light in regard to this information. It is updated once a year. If when you completed this form, you had doubts as to what needed to be entered in a space requested, inquiry with me or someone else who can help you is essential.

Unless I have access to this system, I cannot obtain a copy straight from ORCA. This means that if you are a subcontractor, you will be asked to provide a similar form that is a hard copy to the Prime. A HELPFUL TIP…Section K of your RFP will have the Representations and Certifications form in its entirety for your completion. It is to become a part of your proposal. This will need to match what is on

ORCA, so I recommend that you use a print out of your ORCA as you complete the form.

This article is about that form and any questions that may arise about your ORCA version should you find there is a discrepancy between what a Prime will ask and what is asked on ORCA.

To follow is an example of a Representations and Certifications form found in Section K. This is a good resource to go to in order to learn the form so I am going to use it to make comments. I cannot guarantee that the form you obtain from the Prime will look exactly like this but if it is for you as a subcontractor, there may be added questions for flow-down from the Prime to your responsibilities.

Just look at the next pages and I will have helpful tips in yellow comment bubbles. Call me if you have any questions. If you are working on a commercial contract, you will feel blindsided the first time you get this form. It is for you, most of all that I did this!

Cheryl Ann DePace, Director of Operations,   Contract Connections Administration Services, LLC, 410-302-6251

Use this as a road map to accumulating all the information you need for your business as a Federal Government Contractor.

Core Data:

  • DUNS Information
  • Business Information
  • IRS Consent – Business & TIN Information
  • CAGE / NCAGE
  • General Information
  • Financial Information
  • Executive Compensation Questions
  • Proceeding Questions
  • Information Opt-Out
  • Ownership Detail Disclosure

Assertions:

  • Goods & Services
  • North American Industry Classification System (NAICS) Codes
  • Product Service Codes (PSC)
  • Size Metrics
  • EDI Information
  • Disaster Relief Response Information

Representations & Certifications (Reps & Certs):

  • Certificate of Independent Price Determination
  • Representation of Limited Rights Data and Restricted Computer Software
  • Taxpayer Identification
  • Small Disadvantaged Business Status
  • Small Business Program Representations
  • Place of Performance – Sealed Bidding
  • Equal Low Bids
  • FAR Responses to Architect-Engineer Responses
  • DFARS Responses

Points of Contact (POCs):

  • Accounts Receivable POC
  • Electronic Business POC
  • Government Business POC
  • Past Performance POC
  • Electronic Business Alternate POC
  • Government Business Alternate POC

SMALL BUSINESS CERTIFICATION:

  • SBA Profile Creation
  • Socio-economic Category Certifications

REPORTS:

  • Service Contract Reporting
  • Bio-Preferred Reporting

EXCLUSIONS:

  • Active Exclusions
  • Inactive Exclusions