“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.


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


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.


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


Objectives

Cost

Cost Realism

Price

Price Analysis

Profit


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


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)


What is Cost?

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


Cost Criteria:

Reasonable, Allowable and Allocable

Variable, Fixed, andSemi-Variable

Direct and Indirect


COST CONTRACTS

Cost-Plus-Fixed Fee

Cost-Plus-Award Fee

Cost-Plus-Incentive Fee

Cost-Sharing


Three Basic Cs For Cost Type Contracts

Know your Costs

Know your Customer

Know your Competition


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


What are the Cost Elements? (Your Company)

Direct Labor Overhead Material Subcontractors General and Administrative Travel Profit


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


2) Overhead Continued:

Fringe Benefits:

Employee Health Insurance Annual Leave Sick Leave Family Leave Retirement



Office Space Furniture Electricity Air Conditioning Heat Equipment

CopierComputersPhone



Utilities: Sewage Waste Water Treatment Trash Removal Recycle Program


InsuranceBuilding, Car, TruckWorker’s Compensation

Contract Requirements Credit Cards Bldg. Maintenance Lawn Service

Depreciation

Interest on Loans



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


Build a Cheeseburger?


One make every 30 seconds, start to finish Includes:

Direct Labor Overhead Material Profit

Base Line for the Cheeseburger


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


Overhead

100%


Materials

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


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


Material Costs

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

Total $00.006


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


Cost Elements + Profit = Total Cost

What is Total Cost?


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


Profit

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

Contractor/Government Risk


Profit Statutory Limits

Cost Plus Fixed Fee 10%

Research and Development Cost Plus Fixed Fee 15%

Architect and Engineering Services 6%


What is Price?

Cost Elements + Profit = Price


What is the Price for your Service?


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)


Profit Factors for FFP Contracts

Market Competition

Contractor Risk 100%


Sales-Direct Cost-Indirect Cost= Net Profit

Are you Making a Profit?


Price Analysis

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


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

Firm Fixed Price Contracts


Price must be Fair and Reasonable

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


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


Cost

Cost Realism

Price

Price Analysis

Profit

Summary


Q & A

“Daniel Telep Jr.”Florida Gulf Coast University FSBDC239.745.3708 or 239.745.3700“[email protected]

www.fsbdcswfl.org

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

Documents

cost contracts cost

cost data slide

cost request

cost principles

cost criteria

small businesses

cost type contracts

fixed fee cost