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Contract and pricing incorporation data analysis

Government Contracts, Peacekeeping, Engineering, Independent Contractors

Excerpt from ‘Data Analysis’ section:

Development Case Study


(The prenegotiation objectives create the Government’s initial discussion position. They provide parameters that will be used in the contracting officer’s final perseverance of a good and fair price. They should be based on the results with the acquisition team’s analysis of the offeror’s pitch, taking into consideration almost all pertinent data including field pricing assistance, audit studies and complex technical analysis, fact-finding benefits, independent Govt cost quotes, and selling price histories. The contracting expert must establish and file prenegotiation objectives before the settlement of any pricing action.

A PNM must be a stand alone record that will complete scrutiny in court. The reader should not need to refer to audits or technical reports to generate sense of the PNM. )


AFFILIATES: (List the first and last names and positions of each person representing the Government here. )

First and Last brands


Peter John

Elderly Contracting Professional

Allen Austin

Contracting Professional

Jane Dickens

Assistant Contracting Specialist

Helen Anderson

Assistant Contracting Professional

Johnson The netherlands

Assistant Contracting Specialist

Joe Rogers

Assistant Contracting Consultant

Acquisition Qualifications:

(Include the goal of the settlement and an outline of the buy. )

The purpose of the file is to present the Price Discussion Memorandum for the acquisition of the H-19 Mission Pc as well as the Functional Flight Applications for the H-19A heli-copter. Department of Defense expects to update the H-19 Mission Pc as well as the Operational Flight Courses of the H-19A. The H-19A helicopter is built to meet the Military services troop jar and earth support. At present, the H-19 also supports the U. S. Ocean, Navy, Naval pilot, the Section of Interior and Shoreline Guard. The U. S. government as well uses the H-19 to compliment the peacekeeping. However , the H-19 requires a significant improvement in acceleration, range and cargo capabilities, and the MAS (Malahy Aero Systems) are the only prime company to satisfy the G-19 buy. In essence, the MAS as well as the government have got agreed to total the agreement within 19 months.

Settlement Summary:

(Describe the quality of expense or costs data and the extent it was used. Add a discussion of deal type and elements of price that should be considered, together with issues of risk and doubt to the service provider and the Federal government. )

The negotiation is between the authorities and the Malahy Aero Devices, which is the Contractor to upgrade the pc system of the government H-19A heli-copter.

The contactor has submitted the costs of materials to complete the 19-month project. The builder submitted the entire costs of $43, 868, 081; however , the government objective was $37, 659, 750. Despite the variance recorded, the company was still capable of record the 12% income of $4, 519, 168


(Provide the status of virtually any contractor systems considered through this negotiation. )

The contractor’s accounting systems and material management as well as internal handles for the material management happen to be adequate; however , the control risk remains low. The contractor data employee labor both the direct and indirect labor. In addition , we consider that the labor accounting system and related inner controls while adequate and carrying low risks depending on our analysis.

The charges and price data published by the organization to support the materials are inadequate since their prep is not really in accordance with ideal FAR dotacion, and applicable cost accounting standard. Additionally, the contractor has not provided an adequate documents to back up its position. The concept “question costs” will be the costs which may not always be allowable or allocated to the contract. However, the term “unsupported costs” in our opinion refer to the given and permitted, however , the documentation presented is too little to back up the dollar amount inside the proposal.

Expense Analysis Brief summary:

The company uses the element including the material, Materials Overhead, Executive Labor, Anatomist Overhead, Developing Labor, Production Overhead, Other Direct Costs, GA and Cost of Cash for the proposal prices. However , there exists still a variance between the contractor price data and government target. The total value proposed by the contractor is usually $49, 128, 651

; yet , the government target is $43, 871, 896 revealing the variance of $5, 238, 755

(Then, fill in the subsequent table with the government aim price for every cost element. )








$20, 976, 910

$19, 565, 594

Engineering Group 66-9210 = $158, 990

67-1100 = $481, 175

67-5200 = $593, 409

68-2400 = $98, 342

68-3800 sama dengan $47, 883

68-4800 = $324, 587

68-5300 sama dengan $193, 758

69-1100 =$19, 078, 766

Total sama dengan $20, 976, 910

Material Overhead

$897, 812

763, 058

Material Overhead charge =4. 28%

Based on the existing company prediction

Engineering Labor

$7, 018, 980

$7, 018, 980

Yr one particular: 35, nine hundred hrs times $35. seventy two = $1, 282, 348

Yr2: 150, 250 hrs x $35. 72 sama dengan $5, 009, 730

Yr3: 20, 350 hrs by $35. 72 = $726, 902

Total = $7, 018, 980

Engineering Cost to do business

$3, 287, 690

$2, 912, 877

Engineering Labor Overhead level = 46. 84%

Based on the current firm forecast

Manufacturing Labor

$230, 676

$230, 676

365 days 1: 4 hundred hrs x $25. 12-15 = $12, 060

Year 2: 1, 787 days x $25. 15 sama dengan $44, 943

Yr 3: 6, 985 hrs by $25. 12-15 = $175, 673

Total = $230, 676

Manufacturing Overhead

$253, 444

$251, 898

Developing Overhead price = 109. 87%

Depending on the forward pricing charge agreement

Various other Direct Costs

$5, 822, 798

$3, 418, 235

Engineering Reproduction = $89, 483

Engineering Travel sama dengan $297, 720

Overtime Superior (1, 940 x $52. 15) = $101, 171

Computer Companies = $3, 031, 032

Marketing = $2, 046, 258

Subtotal ODC’s sama dengan $5, 565, 664

Misc ODC’s (4. 62% by Subtotal ODC’s)= $257, 134

Total ODC’s = $5, 822, 798


$38, 488, 798

$34, 161, 318


$5, 199, 771

$4, 830, 018

The paper figures the GA rate = 13. 51%. The calculation is derived using the current accounting info available from the latest monetary year and adjusted based on the approximated of current sale year forecast.

Expense of Money

180, 000

180, 000

Sum agreed upon together with government auditor

Total Cost

$43, 868, 081

a few, 264


5, 242, 570

$4, 700, 560

Based on the 12% of the forecasted Total cost

Total Price

$49, 110, 651

$43, 871, 896

Significant Considerations:

The DCAA (Defense Contract Examine Agency) has audited the proposal after receipt with the proposal advancement the “H-19 Helicopter quest computer improvement. ” Based upon our judgment, the charges or expense data in the proposal are adequate to get the arbitration purpose. However , we statement that the prices and cost data the offeror provides submitted to support the components are not enough because the info are not well prepared in accordance with the applicable “Cost Accounting Specifications and suitable provisions of FAR (Federal Acquisition Regulation) and DFARS (Defense Federal government Acquisition Regulation). ” QUE TIENE 217 (nd). The record of this taxation is competent pending enough time the DCAA receives the technical report.

(Discuss the most significant facts or perhaps considerations controlling the establishment with the prenegotiation targets. To the level, such direction has a significant effect on the action, an analysis and quantification of the influence of way given by Our elected representatives, other companies, and higher-level authorities. )

Element Discussion/Component Breakdown:

(Discuss each key element of cost and if required, sub-elements, and also profit and price intended for the buy. Always begin with the amount the contractor provides proposed and then the amount of the government objective. It might appear redundant to hold providing the amounts if the Summary displays them, although large acquisitions may require long PNMs and readers should never have to turn back and forth to compare the amounts. )

1 . Materials: The builder proposed total direct materials costs of $20, 976, 910. This kind of major component of cost has been divided into distinct engineering groups; therefore , the charge analysis was done to each engineering group to determine the Government’s total material cost goal. The last four digits consider the work-numbering package for the project and they are in accordance with the normal suitable practice. The auditors plus the company consent substantially inside the area.

Executive Group

Contractor’s Proposal

Wondered Costs

Unsupported Costs


$158, 990

$34, 294

$23, 980


481, 175

140, 000

341, 175


593, 409




98, 342




566, 228

47, 883



$19, 078, 766

823, 984



$20, 976, 910

$1, 046, 161

$365, 155

(Discuss in DETAIL how you developed the objective. Who provided the information? What facts was offered? What evaluation techniques had been used? Accomplish this for each engineering group. )

Engineering Group 66-9210:

The contractor proposed $158, 990 for this executive group. The federal government objective can be $100, 716. The Government goal position will be based upon the questioned costs of $34, 294. Thus, we all questioned the proposed costs of $34, 294 since the company applied the $158, 990, which can be the same amount to get the 22-month schedule since the new project is 19-month schedule. Additionally, there are unsupported costs of $23, 980 that the builder proposed intended for the security equipment. In essence, the Malahy has agreed to take out this unsupported amount.

Anatomist Group 67-1100:

The builder proposed $481, 175 for this engineering group. The government target is $0. In essence, we all question the $140, 000, which is the proposed costs of the CLS (cartridge insert software) because the cost is no longer needed based on the initiation within the proposal expansion meeting. Furthermore, the remaining $341, 175 is unsupported for the reason that cost is the quote pertaining to the Orbit Science intended for the Fairchild defense, containing already expired. Malay’s negotiator proposed seven percent reduction, yet , the discussion has not taken place, thus, all of us cannot consider this to be amount since supported. Meanwhile, we have wiped the entire $481, 175 recommended for the Engineering Group.


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Published: 12.27.19

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