“pricing” florida sbdc at fgcu helping businesses grow & succeed “doing business with the...

“Pricing”

Florida SBDC at FGCU

Helping Businesses

Grow & Succeed

“Doing Business with the Government”

State Designated as Florida’s Principal Provider of Business Assistance [§ 288.001, Fla. Stat.]

Helping Businesses Grow & Succeed

Mission Statement

We are a customer-driven organization of business professionals, dedicated to helping small businesses succeed, by enthusiastically providing creative solutions which exceed customer, employee, and stakeholder’s expectations.

Helping Businesses Grow & Succeed

Statewide Infrastructure

Our NetworkStatewide network of 43 centers involving: • State Universities• Colleges• Chambers of Commerce• Economic Development Councils• Federal, State & Local Government

Agencies

Additional outreach is provided at more than 50 outreach locations, utilizing resource partners such as chambers of commerce, economic development organizations, business incubators and lending institutions.

Locations

Helping Businesses Grow & Succeed

Accelerating Florida’s Economy

Only statewide provider of entrepreneurial and emerging growth company services, playing a vital role in Florida’s economic development:

• Assisting entrepreneurs in every stage of the business cycle, from prospective entrepreneurs to mature businesses looking for growth opportunities and more;

• Working with firms in all industry sectors; • Utilizing the expertise and resources of some of the best universities in

Florida (Florida Gulf Coast University)and a professional staff of eleven business consultants;

• Accessing the resources of a national network of more than 5,000 SBDC professionals; and

The FSBDCN is nationally accredited through the Association of SBDCs by Congressional mandate.

Helping Businesses Grow & Succeed

FSBDC Services

Consulting Personalized, confidential and provided at no cost

TrainingValue-added from the basics to advanced topics

Business Data & InformationCurrent and expansive information for better decision-making

Helping Businesses Grow & Succeed

Objectives

Cost

Cost Realism

Price

Price Analysis

Profit

Helping Businesses Grow & Succeed

References

FAR 14 Sealed Bidding

FAR 15 Contracting By Negotiations

FAR 16 Type of Contracts

FAR 30 Cost Accounting Standards Administration

FAR 31 Cost Principles and Procedures

FAR Appendix B Cost Accounting Rules

www.acquisition.gov/far

Helping Businesses Grow & Succeed

Methods of Procurement

Sealed Bids (Price only) Invitation For Bid (IFB)

Negotiated (Price or Cost) Request For Quote (RFQ) (Price only) Request For Proposal (RFP) (Price or Cost Data)

Helping Businesses Grow & Succeed

What is Cost?

Cost is the expense the contractor will incur in performing the work

Helping Businesses Grow & Succeed

Cost Criteria:

Reasonable, Allowable and Allocable

Variable, Fixed, andSemi-Variable

Direct and Indirect

Helping Businesses Grow & Succeed

COST CONTRACTS

Cost-Plus-Fixed Fee

Cost-Plus-Award Fee

Cost-Plus-Incentive Fee

Cost-Sharing

Helping Businesses Grow & Succeed

Three Basic Cs For Cost Type Contracts

Know your Costs

Know your Customer

Know your Competition

Helping Businesses Grow & Succeed

What will the Government Pay?

The Government will reimburse the contractor to do the work as long as the costs are allowable, reasonable, and properly allocable to the contract

Helping Businesses Grow & Succeed

What are the Cost Elements? (Your Company)

Direct Labor Overhead Material Subcontractors General and Administrative Travel Profit

Helping Businesses Grow & Succeed

1) Overhead may include:

Cost of Doing Business!!!!! Taxes

Federal Taxes Social Security (FICA)

Employer Portion Medicare Taxes Property Taxes

Licenses State Licenses County Business Licenses

Helping Businesses Grow & Succeed

2) Overhead Continued:

Fringe Benefits:

Employee Health Insurance Annual Leave Sick Leave Family Leave Retirement

Helping Businesses Grow & Succeed

3) Overhead Continued:

Office Space Furniture Electricity Air Conditioning Heat Equipment

CopierComputersPhone

Helping Businesses Grow & Succeed

4) Overhead Continued:

Utilities: Sewage Waste Water Treatment Trash Removal Recycle Program

Helping Businesses Grow & Succeed

InsuranceBuilding, Car, TruckWorker’s Compensation

Contract Requirements Credit Cards Bldg. Maintenance Lawn Service

Depreciation

Interest on Loans

5) Overhead Continued:

Helping Businesses Grow & Succeed

What are the Cost Elements? (State) Salaries Fringe Benefits Travel Other Direct Costs In-House Charges Indirect Cost Profit

Helping Businesses Grow & Succeed

Build a Cheeseburger?

Helping Businesses Grow & Succeed

One make every 30 seconds, start to finish Includes:

Direct Labor Overhead Material Profit

Base Line for the Cheeseburger

Helping Businesses Grow & Succeed

Direct Labor

½ minute labor $00.20 1 minute labor $00.40

Counter Clerk $8.05 Cashier $8.05 Cook $8.05 Total $24.15

Helping Businesses Grow & Succeed

Overhead

100%

Helping Businesses Grow & Succeed

Materials

Build a cheeseburger starting at the bottom Bun Bottom Mayonnaise Mustard Patty Cheese Pickle Lettuce Tomato Ketchup Sesame Seed Bun Top

Helping Businesses Grow & Succeed

Bun Bottom $00.1251 Mayonnaise $00.0005 Mustard $00.0007 Patty $00.2900 Cheese $00.0300 Pickle $00.0200 Lettuce $00.0080 Tomato $00.0500 Ketchup $00.0004 Sesame Seed Bun Top $00.1253

Total $00.6500

Material Costs

Helping Businesses Grow & Succeed

Material Costs

Wrapping Paper $00.015 Bag $00.015 Napkins $00.015 Salt/Pepper $00.015

Total $00.006

Helping Businesses Grow & Succeed

Cost Elements for the Cheeseburger?

Direct Labor $00.20 Overhead 100% $00.20 Material $00.71 Subtotal $01.11 Profit 10% $00.11 Total Cost $01.22

Helping Businesses Grow & Succeed

Cost Elements + Profit = Total Cost

What is Total Cost?

Helping Businesses Grow & Succeed

Cost Realism

Cost and Technical proposals must be realistic for the work to be performed

Reflect a clear understanding of the requirement

Cost must be consistent with the various elements of the technical proposal

Helping Businesses Grow & Succeed

Profit

Represents the payment the contractor may receive for performance over and above the cost incurred for doing the work

Contractor/Government Risk

Helping Businesses Grow & Succeed

Profit Statutory Limits

Cost Plus Fixed Fee 10%

Research and Development Cost Plus Fixed Fee 15%

Architect and Engineering Services 6%

Helping Businesses Grow & Succeed

What is Price?

Cost Elements + Profit = Price

Helping Businesses Grow & Succeed

What is the Price for your Service?

Helping Businesses Grow & Succeed

Price

Direct Labor $10.00 (Unloaded Rate)

Overhead $15.00 Est. 150%

Material $03.20 Subtotal $28.00

Profit $02.80

Total Price $31.00 (Loaded Rate)

Helping Businesses Grow & Succeed

Profit Factors for FFP Contracts

Market Competition

Contractor Risk 100%

Helping Businesses Grow & Succeed

Sales-Direct Cost-Indirect Cost= Net Profit

Are you Making a Profit?

Helping Businesses Grow & Succeed

Price Analysis

Process of examining and evaluating a proposed price without regard to evaluating the separate cost elements and proposed profit.

Helping Businesses Grow & Succeed

Firm-Fixed-Price Firm-Fixed Price with Economic Adjustments Indefinite Delivery Contracts Time and Material Labor Hour Letter Contract

Firm Fixed Price Contracts

Helping Businesses Grow & Succeed

Price must be Fair and Reasonable

Based on: Adequate Price Competition Previous Prices Yardstick Published Prices or Independent Government Estimate

Helping Businesses Grow & Succeed

2080 Hours = Government Year Loaded-Unloaded Rates Separate Technical and Cost Proposals DCMA-

Direct Labor Rates Overhead G&A (For a Specific Company)

Best Value Awards Technical Past Performance Price

TIPS

Helping Businesses Grow & Succeed

Cost

Cost Realism

Price

Price Analysis

Profit

Summary

Helping Businesses Grow & Succeed

Q & A

“Daniel Telep Jr.”Florida Gulf Coast University FSBDC239.745.3708 or 239.745.3700“dtelep@FGCU.edu

www.fsbdcswfl.org