dau brief - contract pricing training
TRANSCRIPT
Contract Pricing Training
Curriculum Modernization
• Functional Advisor letter of 2001 directed DAU to modernize curriculum:– based on updated competency list – Incorporate distance learning technologies
• Level I curriculum designed to develop price analysis skills
• Level II curriculum designed to develop cost analysis skills.
Pricing Competencies
• Knowledge of the range of contract pricing techniques and appropriate applications
• Price & Fee Adjustment• Price analysis (negotiated acquisitions)• Cost analysis
Modernization Philosophy
• Alignment of mission outcomes with contract performance outcomes
• Command of a Common Process across any mission area– Develop solid foundation of technical understanding
• Thinking Business Strategists who can – Think Critically to develop effective support strategies– Think Strategically and Tactically– Team Effectively linking Mission Results with optimum
Business Strategies
Level II certification
CON 202Intermediate Contracting
2 weeks classroom
CON 204Intermediate Contract Pricing
2 weeks classroom
CON 210Contract Law
1 week classroom
Level I certificationLevel III certification
1 Elective
2 Electives
CON 110 Mission Support Planning
CON 111 Mission Planning Execution
CON 112 Mission Performance Assessment
CON 100Shaping Smart Business
Arrangements
CON 120Mission Focused Contracting
1 week classroom
2 weeks classroom
CON 353Advanced Business
Solutions for Mission Support
2 weeks classroom
16 -24 hours, on-line
Competency Based Contracting Certification Training
Track
current courses
new courses
Level I Cert
Level II Cert
Level III Cert
2 Electives
90 hours on-line target
2 Electives
Case Based Application
Supply – Body Armor
Services - IT
Services
Supply
CON 214Effective Business Practices
CON 215Services Case
CON 217Cost/Pricing & Negotiation
CON 218Supply Case
CON 216Legal Issues
8 days classroom
9.5 days classroom
20- 30 hours, on-line
26-40 hours, on-line
Assignment Specific Courses
• Overhead Management of Defense Contracts (CON 232)– calculate the overhead, IR&D/B&P rates, and
depreciation• Advanced Contract Pricing (CON 235)
– Procurement Environment– Market Research– Research Methods– Risk Analysis– Parametric Techniques
Back-up Slides
Mission Planning Execution (CON 111)
• Purpose of conducting an analysis of a contractor’s price proposal
• Factors that affect price analysis considerations
• Factors that affect cost analysis and cost realism analysis
• Determine whether to use price analysis or cost analysis
• Preferred price analysis techniques
• Other information needed to perform analysis
• Factors that affect price comparability
• Select appropriate price evaluation technique Develop pre-negotiation objective
• Subcontract pricing considerations
Contracting for Mission Support (CON 120)
• Calculate the Government's price objective using Price Index Numbers
• Calculate the Government's price objective using Cost-Volume Analysis
• Given a contracting scenario, determine price reasonableness
• Determine the basis for comparison when performing price analysis
Cost Analysis & Negotiation Techniques (CON 217)
• Intro to Cost Analysis• Contract Audits• Accounting & Estimating
Systems• Analyzing Direct Material• Analyzing Direct Labor• Analyzing Other Direct
Costs• Analyzing Indirect Costs
• Facilities Capital Cost of Money
• Profit & Fee Analysis• Statistics• Simple Regression
Analysis• Improvement Curve
Analysis
Advanced Contracting for Mission Support (CON 218)
• Demonstrate knowledge of various types of audits• Use a DCAA audit to prepare a negotiation position• Determine the allowability of contractor costs• Evaluate the impact/implications of contractor accounting
and estimating systems in proposal evaluation• Select the appropriate method for calculating an equitable
adjustment• Apply the full range of contract pricing techniques• Determine the appropriate contract adjustment• Establish the final price or fee adjustments
Advanced Contract Pricing (CON 235)
• Procurement Environment– Seller's perspective (business and marketing
strategies)– Statutory/regulatory environments with respect to
TINA, TINA waivers, cost and pricing data, information other than, commercial items, commercial mods
– Contract financing (PBP and commercial item)
• Market Research– Process/application– Techniques– Sources (including in a services environment)– Using technical experts to understand pertinent
technical aspects
Advanced Contract Pricing (CON 235)
• Research Methods– Survey of pricing methods (analogies, expert opinion,
cost estimating relationships, forecasting) – Normalization - compare apples and oranges – "Seeing" the data using graphical techniques– Portraying and explaining data– Using EVM data
• Risk Analysis– Understanding distributions– Using probabilities – Understanding risk in an IPT pricing environment
Advanced Contract Pricing (CON 235)
• Parametric Techniques– Cost Estimating relationships (CERs) – Factors– Cost Improvement Curves and applications– Simple, Multiple and Non-linear regression
Principles of Contract Pricing (CON 104)
Contract Pricing Cost Analysis
Market research for cost analysis Defining costs
Maximizing price competition Obtaining information for cost analysis
Price related information from offerors Evaluating work design
Identifying and applying price related factors Direct material costs
Comparing prices Direct labor costs
Price index numbers Other direct costs
Cost-volume-profit analysis Indirect costs
Net present value analysis Cost allowability
Cost estimating relationships Facilities capital cost of money
Regression analysis Analyzing profit or fee
Improvement curves
Accounting for differences
Documenting pricing actions
Intermediate Contract Pricing (CON204 )
• Statistics• Regression• Indirect Cost Analysis• Fixed Price & Cost Plus
Incentive arrangements• Index Numbers and
Economic Price Adjustments
• Market Research
• Net Present Value• Equitable Adjustments• Cost Realism• Defective Pricing• Improvement Curves• Equitable Adjustments
for Work Stoppages• Pricing Terminations