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Proposal Pricing and Estimating: Understanding FAR and DFARS

June 30, 2020

Nate Garrison, Senior ManagerAndy Kangelaris, Manager

Agenda

Review of Business Systems & Key Requirements

Review of Estimating System & Key Requirements

Common Business Systems Themes

Truthful Cost or Pricing Data (“TINA”) – The Basics

Cost or Pricing Data

Basis of Estimate (BOE)

Questions/Open Forum


DFARS Business System Rule 252.242-7005 Contractor Business Systems

Types of Business Systems

1. Accounting System

2. Estimating System

3. Purchasing System

4. Earned Value Management Systems (EVMS)

5. Material Management and Accounting System (MMAS)

6. Property Management System

• Control Environment• Billing• Labor Reporting• Indirect/ODC• IT• Compensation

Contracting with the U.S. Government – An Overview

Business System Flow of Info

Labor

AccountingMMAS

Purchasing

PropertyBilling EVMS

Comp.

Indirect/ODCs

B&P

Estimating

Cost Representations

5

* Key Consideration: A weakness in one could result in the failure of many

Definitions

Acceptable Contractor Business Systems

Contractor business systems that comply with the terms and conditions of applicable business system clauses listed in the definition of “contractor business system” in this clause.

Significant Deficiency

A shortcoming in the system that materially affects the ability of officials of the Department of Defense to rely upon information produced by the system that is needed for management purposes.

DefinitionsSignificant Deficiency (continued)

DCAA MRD (12-PAS-012(R)) – Audit Guidance on Auditing Contractor Business Systems and Contractor Compliance with DFARS 252.242-7006, Accounting System Administration “If there is a reasonable possibility that the identified noncompliance with

the DFARS criteria will result in a material noncompliance with other applicable Government contract laws and regulations, either individually or in combination, it is a significant deficiency/material weakness.”

DCAA MRD (14-PAS-009(R)) – Audit Guidance on Reporting Business System Deficiencies Report less severe noncompliance separate from significant deficiencies Either separate section in the same audit report or in a memorandum to the

ACO

Withholding Payments “If the Contracting Officer issues the final determination with a notice to

withhold payments for significant deficiencies in a contractor business system required under this contract, the Contracting Officer will withhold five percent of amounts due from progress payments and performance-based payments, and direct the Contractor, in writing, to withhold five percent from its billings on interim cost vouchers on cost-reimbursement, labor- hour, and time-and-materials contracts until the Contracting Officer has determined that the Contractor has corrected all significant deficiencies…”

“The total percentage of payments withheld… shall not exceed Five percent for one or more significant deficiencies in any single contractor business

system; and

Ten percent for significant deficiencies in multiple contractor business systems.”

DCMA is maxing this out by applying on contract-by-contract basis when multiple systems are disapproved

ACO can reduce withhold to two percent with acceptable CAP


When Do the Rules Apply?

Business System RequirementsWhen do the Business System Rules Apply?

Any DoD contracts or subcontracts awarded subsequent to May 18, 2011, for which no exemptions from CAS are available.

DoD CAS covered contract that contain the clause at 252.242-7005, Contractor Business Systems, and one of the following clauses: 252.215-7002, Cost Estimating System Requirements Policies, procedures, and practices for budgeting and planning controls, and

generating estimates of costs and other data included in proposals submitted to the government in the expectation of receiving contract awards.

252.234-7002, Earned Value Management System A system for project management that effectively integrates the project scope of

work with cost, schedule and performance elements for optimum project planning and control.

252.242-7004, Material Management and Accounting System Manual or automated system or systems for planning, controlling, and accounting

for the acquisition, use, issuing, and disposition of material, which may be integrated with other systems such as estimating, purchasing, inventory, and accounting.


252.242-7006, Accounting System Administration System or systems for accounting methods, procedures, and controls established

to gather, record, classify, analyze, summarize, interpret, and present accurate and timely financial data for reporting in compliance with applicable laws, regulations, and management decisions. Systems may include subsystems for specific areas such as indirect and other direct costs, compensation, billing, labor, and general information technology.

252.244-7001, Contractor Purchasing System Administration System or systems for purchasing and subcontracting, including make-or-buy

decisions, the selection of vendors, analysis of quoted prices, negotiation of prices with vendors, placing and administering of orders, and expediting delivery of materials.

252.245-7003, Contractor Property Management System Administration System or systems for managing and controlling government property.


Biz System DFARS Clause Applies Typical Frequency

General 252.242‐7005 DoD CAS Covered Contract which contains the clause AND one of the following Clauses N/A

Accounting 252.242‐7006

Use the clause at 252.242‐7006, Accounting System Administration, in solicitations and contracts when contemplating—

(a) A cost‐reimbursement, incentive type, time‐and‐materials, or labor‐hour contract; or(b) A contract with progress payments made on the basis of costs incurred by the

contractor or on a percentage or stage of completion.

Every 3 years

EVMS 252.234‐7002When the contract requires the contractor to use EVMS(e.g., >$20M)However, in DoD, EVMS is only applicable to cost or incentive contracts valued at $100M or more (if its below, requirements are risk based decision)

Every 3 years

Estimating 252.215‐7002

1. Contract award is based on certified cost or pricing data2. However, the system requirements and withhold authority only applies to large businesses that received DoD prime contracts and subcontracts totaling more than $50M (sometimes $10M) in their prior fiscal year based on certified cost or pricing data

2. Exemptions include: sale of commercial items, competitively awarded FFP;

Every 3 years


Biz System DFARS Clause Applies Typical Frequency

MMAS 252.242‐7004

1. Requirements apply to all non‐commercial contracts > SAT AND are‐either cost based or‐ involve progress payments based on costs incurred by supplier as WIP

The Government may review any contractor MMAS when the contractor has received qualifying sales of DOD prime contracts or subcontracts > $40 million or more in its preceding fiscal year. ‐ Qualifying sales are those which cost or pricing data were required, or priced on other than FFP

or FP w/ economic price adjustment basis. ‐ Sales include prime contracts, subcontracts, and modifications to such contracts and

subcontracts.

Every 3 years

Property 252.245‐7003

1. Contract contains the clause 52.245‐1, Government Property‐ All cost‐reimbursement & T&M; LH when Government property is expected to be furnished‐ Fixed‐price when the Government will provide Government property‐ Awards under FAR Part 12 when Government property over SAT is furnished

Every 1‐3 years based on a risk assessment

Purchase 252.244‐7001

1. Contract contains the clause 52.244‐2, Subcontracts‐ All cost‐reimbursement‐ Letter contracts, T&M, LH > SAT‐ Fixed‐price > SAT with anticipated unpriced options

However, within DoD, CPSRs are only conducted if a contractor’s sales to the Government are expected to exceed $50 million during the next 12 months.‐ Exemptions:

Competitively awarded FFP contractsCompetitively awarded FP w/EPA Commercial Item Contracts (FAR Part 12; SF 1449)

Every 3‐5 years

Business System RequirementsWhat if My Contracts Don’t have the Business System Clauses?

If a contract doesn’t have the clauses, there is no withhold authority.

However even if your contract doesn’t have the DFARS clauses, you will likely be held to the standards created by those clauses as they have been incorporated into the audit/review programs.

Additionally, DCAA has audit policies/programs which state that “the DFARS Business Systems Criteria is suitable criteria for determining the acceptability of any contractor’s system”. Hence, any accounting or other system touched by a DCAA audit is at risk for issues involving compliance with one or more the DFARS Business Systems Criteria.

Business System RequirementsWhat if My Contracts Don’t have the Business System Clauses?

Business System Requirements

What if the contract doesn’t have the clauses?

DCAA has incorporated the clause requirements in its audit programs Billing Audit Control Environment Accounting System Material Management and Accounting

System Estimating System Audit EVMS, System Validation or Surveillance

DCMA has incorporated the clause requirements in its published policies Contract Property Management Contractor Purchasing System Reviews Material Management and Accounting

System (MMAS) Review Earned Value Management System

Compliance Review

Business System RequirementsWhat Other Standards are Contractors Held to?

Whether or not the requirement is in the applicable DFARS rule, DCAA/DCMA have certain criteria they are looking for when assessing business system adequacy: DCAA Audit Programs DCAA Contract Audit Manual (CAM) DCAA Internal Control Audit Planning Summaries (ICAPS) DCMA Policies and Internal Review Criteria Other Contractual Terms and Conditions and Public Law Requirements DPAP Policies & Procedures DoD Proposal Adequacy Checklist (DFARS 252.215-7009) DoD Forward Pricing Rate Adequacy Checklist (Proposed DFARS Rule 2012-

D035) Advance Agreements

Review of Estimating System & Key Requirements

DFARS Estimating System

Business System RequirementsCost Estimating System – DFARS 252.215-7002

Overview of requirements

Written description of system – and demonstration of compliance Full BOE documentation Proposal formats comply with FAR 15.408 Table 15-2 (when applicable) Comprehensive training plans Independent Management reviews and timely identification of errors Constant maintenance/improvement of system

Business System RequirementsCost Estimating System – DFARS 252.215-7002

An acceptable estimating system shall accomplish the following functions:1. Establish clear responsibility for preparation, review, and approval of cost estimates

and budgets.2. Provide a written description of the organization and duties of the personnel

responsible for preparing, reviewing, and approving cost estimates and budgets.3. Ensure that relevant personnel have sufficient training, experience, and guidance to

perform estimating and budgeting tasks in accordance with the Contractor's established procedures.

4. Identify and document the sources of data and the estimating methods and rationale used in developing cost estimates and budgets.

5. Provide for adequate supervision throughout the estimating and budgeting process.6. Provide for consistent application of estimating and budgeting techniques.7. Provide for detection and timely correction of errors.8. Protect against cost duplication and omissions.9. Provide for the use of historical experience, including historical vendor pricing data,

where appropriate.10. Require use of appropriate analytical methods.

Business System RequirementsCost Estimating System Cont. - DFARS 252.215-7002

11. Integrate data and information available from other management systems.12. Require management review, including verification of compliance with the company's

estimating and budgeting policies, procedures, and practices.13. Provide for internal review of, and accountability for, the acceptability of the

estimating system, including the budgetary data supporting indirect cost estimates and comparisons of projected results to actual results, and an analysis of any differences.

14. Provide procedures to update cost estimates and notify the Contracting Officer in a timely manner throughout the negotiation process.

15. Provide procedures that ensure subcontract prices are reasonable based on a documented review and analysis provided with the prime proposal, when practicable.

16. Provide estimating and budgeting practices that consistently generate sound proposals that are compliant with the provisions of the solicitation and are adequate to serve as a basis to reach a fair and reasonable price.

17.Have an adequate system description, including policies, procedures, and estimating and budgeting practices, that comply with the Federal Acquisition Regulation and Defense Federal Acquisition Regulation Supplement.

Business System RequirementsKey Considerations for Estimating System

252.215-7002, Cost Estimating System: Is window into Contractors DFARS Purchasing System adequacy (i.e., failures in

estimating system typically are a result of failures in Purchasing System) Criteria 4, 9, 11, & 15

Failures in Estimating System may lead to additional scrutiny in DFARS Accounting System Criteria 17: Adequate, reliable data for use in pricing follow-on acquisitions

How do you document reviews?

Process Flow & Consequences of Disapproval

•Initial determination letter (10 days)

Contract Requirement

USG Audit Source

•Business System Audit

•DCAA SOCAR

DCAA Recommendation

•System Inadequacy

ACO Initial Determination(10 Days)

Potential Significant Deficiencies?

•DoD contract, BSR Clause (1)

Contractor submits response and/or CAP

(30 Days)

Adequate No Billing Withholds

Inadequate but CAP acceptable

2-5% Withhold per system

Inadequate/CAP not acceptable

5% Withhold per system

ACO evaluates response/CAP

(30 Days)

ACO Final Determination

(1) If no BSR Clause, no withholds but system(s) can still be disapproved.

DFARS Business System Rule – Process Flow

YES NO

No Further Action

System DisapprovalsConsequences of System Deficiencies

Billing Withholds Imposed (where applicable)

Disclosure of deficient system status: Results in greater audit oversight Complicates negotiations, calls into question accuracy of proposed costs Limitations on evaluation criteria for new/follow-on work

Potential for USG to attach issues to other Business Systems i.e. Purchasing System issue can lead to questioning Estimating System All roads lead to Accounting System

Accounting System Inadequacy: USG prohibited from awarding Flexibly-Priced Contracts FAR 16.301-3 Limitations: A cost-reimbursement contract may be used only when the

contractor’s accounting system is adequate for determining costs applicable to the contract or order

Resource drain to address inadequacies

Common Themes

Business System RequirementsCommon Business System Requirements/Expectations

Policies and Procedures Defines roles & responsibilities Identifies people, processes, and technology used in the business system Provides guidance on compliance with company policies, contract requirements Training Educates personnel on their job responsibilities Ensures awareness of policy & procedure information Sound Organizational Structure Ensures proper segregation of duties Defines roles, responsibilities, and authority limits for personnel in the business

system Management Oversight & Review Provides management with insight into system performance and compliance Reduces the risk of fraud, waste, and abuse

System DisapprovalsCommon Themes

Accounting: CAS non-compliances (logical and consistent method for the accumulation and

allocation of indirect costs) Questioned costs (Incurred Cost Audit) Billings not reconciled to the cost accounts for both current and cumulative amounts

claimed and comply with contract terms Unallowable cost Inadequate Timekeeping practices Cost accounting: By contract clause if required (Limitation of Cost or Funds,

Allowable Cost & Payment), Readily calculate indirect cost rates from books

Estimating: Supplier cost/price analysis, Defective Pricing, Documentation Purchasing: Supplier cost/price analysis (LTAs, etc), Documentation Property: Inventory and Asset controls, Documentation EVMS: Inadequate variance analysis documentation, Cost and schedule

integration, Data integrity issues MMAS: Key metric monitoring, Inventory management, Documentation

Lessons Learned from System Disapprovals

Act Quickly: Potential to remediate issues before withholds are in place

Work closely with ACO Communicate, brief them on CAP, give them a level of comfort that you are

taking the issue seriously (a good relationship helps) Most won’t challenge DCAA on deficiency recommendations, but many

willing to work with contractor Approved CAP can lower withholds from 5% to 2%

Follow through with CAP actions, provide ACO with progress briefings Withhold can be increased from 2% back to 5% if CAP actions no longer

adequate

What Can You Do?

Key Takeaway: Policies & Procedures in place, Behaviors are consistent with those P&Ps

Maintain a positive working relationship with DCAA and DCMA is essential Be proactive in your compliance program – don’t wait until the USG schedules

an audit Use the Play book Know what business systems require Government approval and how DCAA/DCMA

will likely audit or review

Map your controls to the DFARS evaluation criteria in advance Self assessment Identify system gaps based on DFARS/FAR evaluation criteria, the DCAA Audit

Program/ICM and your business system controls

Consider establishing an on-going compliance management planning process to identify and periodically review control risks and mitigation plans to ensure you’re on-track

Building Documentation for Maintaining ComplianceDeveloping Policies and Procedures

Along with remediating design gaps consider the following: Are policies and procedures consistent across the organization Policy vs. Procedure vs. Manual, etc.

Document roles & responsibilities

Don’t write policies for compliance; write them for the business and incorporate compliance components

Building Documentation for Maintaining ComplianceOther Key Documentation

An internal control matrix that serves as a data base for internal controls and identifies Control objectives, risks, and owners Location in policies, procedures, and process flows

Process flowcharts: Document the work flow and highlight internal controls Process flowcharts and internal controls’ matrix that demonstrate

compliance

Use these documents during system walkthroughs with auditors/reviewers to help them gain an understanding

Process of Developing and Maintaining Compliant Business Systems4 Key Steps

1. Assess System Adequacy Assess processes and controls against DCAA/DCMA requirements

2. Remediate Deficiencies Address any gaps

3. Prepare Compliance Documentation Process Flows Policy & Procedure Development

Process of Developing and Maintaining Compliant Business Systems (Cont.)

4. Establish Monitoring and Maintenance Plan Develop and implement Controls Testing Plan Determine test objectives Determine sample size Make steps repeatable Identify appropriate reviewer Determine frequency

Develop and implement Training Plan Document attendance and course materials Plan should include Functional policies & procedures Business Ethics & Code of Conduct Applicable Laws & Regulations

Policy & Procedure Review Plan Review for changes in process/organization/regulation

Truthful Cost or Pricing Data (“TINA”)– The Basics

Truthful Cost or Pricing Data (“TINA”) - The Basics

The Truthful Cost or Pricing Data statute (commonly referred to by its historical name, the Truth in Negotiations Act or “TINA”) was originally enacted through Public Law 87-653 and incorporated at 10 U.S.C. §2306(a) in 1962. Implemented through FAR Subpart 15.4 and DFARS 215.403

Purpose: to level the negotiation playing field by ensuring Government negotiators have access to the same pricing information as contractor’s negotiators. Imposes no restriction on the proposal or proposed price.

Requires contractors to provide “cost and pricing data” for negotiated contract actions above specified dollar threshold. contracts actions include contract modifications, regardless of whether

contract required submission of such data. Failure to properly provide cost or pricing data (i.e. “defective pricing”) may

lead to contract price reduction and other sanctions.


Current TINA threshold is $2 million (changed 7/1/2018 from $750,000). Contractor (or subcontractor) required to submit certified cost or pricing data

when: Award or modification of a contract expected to exceed $2 million. Award or modification of a subcontract at any tier expected to exceed $2

million if the Government required the prime contractor and each higher-tier subcontractor to submit certified cost or pricing data.

Negotiated final pricing actions, such as termination settlements, where $2 million threshold is met.

Agency may also require certified cost or pricing data under the $2 million threshold if the head of the contracting agency finds it necessary to determine whether price is fair and reasonable and factually supported.


Six Exceptions to Requirement of Certified Cost or Pricing Data• Below Simplified Acquisition Threshold (currently $250,000).• The agreed-upon price is based upon adequate price competition. • The agreed-upon price is based on prices set by law or regulation.• The procurement is for a commercial item.• Minor modifications to commercial items.• A waiver has been granted by the head of contracting activity due to

exceptional circumstances.

*Exemptions granted for the last two items are extremely rare.

Cost Or Pricing Data


Cost or pricing data is defined at FAR 2.101 as “all facts that, as of the date of price agreement, or, if applicable, an earlier date agreed upon between the parties that is as close as practicable to the date of agreement on price, prudent buyers and sellers would reasonably expect to affect price negotiations significantly.”

Cost or pricing data are factual, not judgmental, and verifiable.

Although cost or pricing data do not indicate the accuracy of the prospective contractor’s judgment about estimated future costs or projections, they should include the data forming the basis for that judgment.


Form of Disclosure –Contracting Officer can require submission of cost or pricing data:

(a) in the format specified in FAR 15.408, Table 15-2;(b) in a specified alternate format; or (c) in the contractor’s own format.

To whom must contractors disclose: Generally submit to contracting officer or contracting officer’s authorized

representative. Disclosures to ACOs and auditors not specifically involved in auditing a

proposal may be insufficient. Subcontractors disclose to prime contractors or submit to government.


FAR 15.406-2 requires contractors to certify submission of cost or pricing data: To best of knowledge or belief Data disclosed is accurate, complete and current


Cost or pricing data may include, but are not limited to, data related to the following: Vendor quotations; Changes to CBA; Nonrecurring costs; Information on changes in production methods and in production or

purchasing volume; Data supporting projections of business prospects and objectives and related

operations costs; Unit-cost trends such as those associated with labor efficiency; Make-or-buy decisions; Estimated resources to attain business goals; and Information on management decisions that could have a significant bearing

on costs.

Basis of Estimate (BOE)

Purpose of a BOE

Documents and substantiates effort required to perform tasks Documents basis and assumptions Details understanding of requirements Conveys credibility by clearly defining tasks and assumptions Demonstrates that estimates are credible, defendable and realistic

(historical data) Provides evidence that estimate is consistent with other proposal volumes Time-phased resources consistent with IMP/IMS Allocates resources such as skill mix appropriate for task Aligns with Work Breakdown Structure (WBS), SOW, and other product

structures Meet customer funding, timing, and/or scheduling constraints

BOEs – The Components

A BOE consists of the following main elements:1. Work Element ID – WBS, SOW, Location, CLIN, NRE/Rec…2. Description of the products or services delivered and the tasks to be

performed3. Estimating method, rationale, assumptions, and computations used to

develop the estimate Method of quoting

4. Relevant historical data and comparability of the historical data to the current program Explanation of any adjustments made to historical cost or programmatic data

(i.e., use of modifiers)

5. Estimated labor and ODC resources to perform the defined tasks6. Expenditure profile (time-phasing) of resources7. Other elements as required by the cost proposal instructions

BOE Estimating Methods

Estimates are developed using one or more of these typical estimating methods Judgment – based on subject matter expert (SME) experience with similar efforts. Level-of-Effort/Support - uses resource-based estimates that are often based on a

predetermined level of support for a given period of time Analogy/Comparison Method – estimate based on historical frame of reference from

a similar effort with adjustments for programmatic or technical differences Standard Time Estimating - Labor Standards and Realization/ Performance Factors -

time necessary to complete a defined element of work following a prescribed (recognized) technique or method.

Unit Method – generally a simple ratio (not always statistically validated) Follow-on Based On Actuals – extrapolation of actuals (CEAC, production) Parametric Cost Models – use of calibrated, internally developed, or commercially

available cost models Cost Estimating Relationships (CERs) - equations developed based on historical,

statistically correlated relationships

“Data Driven” BOEs – Basic Definition

Fact Based Estimating: Estimating processes/BOEs that provide the supporting information and rationale necessary for accurate, credible and traceable estimates

Information includes: Use of defined estimating methods Historical data from past programs Use of objective scope measures and complexity factors where appropriate

Rationale addresses: Complete description of the estimating approach Explanation of the applicability of the historical information

Estimating process must be documented, consistent and repeatable

Fact Based BOEs – The Fundamentals

1. Estimate developed using a defined and documented estimating processes2. Methods rely on scope measures (attributes) and complexity factors

(parametrics) – when applicable3. Complete estimate development process is explained and documented in the

BOE Professional judgments, modifiers/adjustment factors, and historical

context is adequately explained Process is consistent and repeatable

4. Estimate relies on relevant historical data and context that is accessible and verifiable Shows use of latest and most current relevant data Supports all resource estimates with verifiable data

5. Estimating processes are monitored for learning and improvement as required to support future estimates

Objective Work-Scope Measures (OSM)

Scope Measures = estimating predictive measures – technical measures relating to the size of the effort (attributes) Generally physical and technical measures Sized at different product levels - system, subsystem, box, etc. Example: Work Products: # drawings by type, sheet counts, # documents & sheet count, SLOC by

category, # requirements, # reviews, # test & type, weight, quantities, etc.

Traits/Complexity Factors: characteristics that can improve the accuracy of relationships developed for the OSMs Example: Scope Measures = Drawings Traits: (numeric and descriptive): # Drawings, Type of Drawing; Drawing Heritage; Item Next

Higher Assembly/Element; Number of Sheets; # of Revisions

Example: Scope Measures = Source Lines of Code (SLOC) Traits: Software Language; New SLOC; Modified SLOC; Reuse SLOC; Actual Total Delivered

SLOC, Deleted SLOC, Auto Generated Code, etc.

Why Use Scope Measures and Traits in BOEs?

Scope Measures - help to scope the size of the effort to be estimated Objective quantitative measures of scope to be performed Directly correlate to (predictors) resource estimates for work products and

tasks Understanding the size (scope) of the proposed effort is critical to

developing an accurate estimate (BOE) The BOE author should explain the derivation, source, and application of

the scope measures in the BOE Traits/Complexity Modifiers – address unique characteristics of the scope

measures that can affect required effort to produce Capture the effects of technical and programmatic differences between

historical programs and the current proposed effort. The “produceability” can vary widely for any scope measure - traits can be

used to explain the differences Sometimes requires judgment

Explaining Adjustment to a BOE

In order to use an objective or subjective adjustment, an estimator must explain it thoroughly.

Provided below are some examples of adjustments that may be required to improve the accuracy of the estimate. The list is not meant to be totally inclusive of adjustments an estimator has available in their tool box. Technical Complexity ~ Labor Estimate Improvement Curves ~ Labor Estimate Schedule adjustments ~ Labor Estimate Quote Decrement ~ Material Estimate Quantity Adjustment ~ Material Estimate Escalation ~ Material Estimate Exchange Rate ~ Material Estimate

Using Historical Data in a BOE

Use of historical data must address: Source of data – generally from the organization’s certified historical data

repositories Complete identification of the nature, source and details of relevant

historical data

Ensure compliance with A.C.T.T.R. by documenting the following: Actual historical hours Charge numbers included Technical data used Time frame of historical data Repository or source of historical data

“Data Driven” Estimating - Examples

We are all confronted in our daily lives with estimates for products and services E.g. Home remodel, auto repair

We evaluate the credibility of these estimates based upon the content of the estimate

We need to apply this customer mentality when we review our own proposal cost volumes and BOEs

Example: Everyone has dealt with an automobile repair estimate that we struggle to feel comfortable with. Evaluate

the following BOEs for automobile repair service – how do we as consumers know that we are getting a fair price for these

services

BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms.

Questions / Discussion?